<PAGE> 1
PROSPECTUS SUPPLEMENT RULE 424(B)(2)
(TO PROSPECTUS DATED FEBRUARY 16, 1994) FILE NO. 33-51216
$100,000,000
[LOGO]
GREYHOUND FINANCIAL CORPORATION
FLOATING RATE NOTES DUE FEBRUARY 15, 1996
------------------------
Interest on the Floating Rate Notes Due February 15, 1996 (the "Notes") is
payable quarterly in arrears on February 15, May 15, August 15, and November 15
of each year, commencing May 16, 1994. The interest rate for each Interest
Period (as herein defined) will be a rate of .25% per annum above the arithmetic
mean of London interbank offered quotations ("LIBOR") for three-month U.S.
dollar deposits prevailing two London Business Days before the beginning of each
Interest Period; provided, however, that the interest rate on the Notes for the
initial quarterly Interest Period ending May 15, 1994 will be determined on
February 23, 1994. See "Description of Notes -- Interest." The Notes will not be
redeemable prior to maturity.
The Notes will be represented by one global security (the "Global
Security") registered in the name of the nominee of The Depository Trust
Company, which will act as depository (the "Depositary"). Interests in the Notes
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants. Except as described herein
under "Description of Notes," owners of beneficial interests in the Global
Security will not be entitled to receive physical delivery of Notes in
definitive form and the Global Security will not be exchangeable except for one
or more other global securities of like denomination and terms to be registered
in the name of the Depositary or its nominee. The Notes will trade in the
Depositary's Same-Day Funds Settlement System until maturity or until the Notes
are issued in definitive form, and secondary market trading activity in the
Notes will therefore settle in immediately available funds. All payments of
principal and interest will be made by the Company in immediately available
funds. See "Description of Notes" herein.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
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<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(3)
- ------------------------------------------------------------------------------------------------
Per Note................... 100% .25% 99.75%
- ------------------------------------------------------------------------------------------------
Total...................... $100,000,000 $250,000 $99,750,000
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from February 25, 1994.
(2) The Company has agreed to indemnify the several Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $175,000.
------------------------
The Notes are offered severally by the Underwriters, as specified herein,
subject to receipt and acceptance by them and subject to their right to reject
any order in whole or in part. It is expected that the Global Security will be
ready for delivery through the facilities of the Depositary on or about February
25, 1994.
------------------------
CITICORP SECURITIES, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
------------------------
The date of this Prospectus Supplement is February 17, 1994.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED HEREBY AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
GREYHOUND FINANCIAL CORPORATION
Greyhound Financial Corporation, a Delaware corporation (the "Company"),
engages in the business of providing secured financing of selected commercial
and real estate activities in the United States and intermediate-term lending on
a secured basis in foreign countries. The Company accomplishes this through
secured loans and leases. The Company is in the process of winding down the
majority of its European operations.
The Company generates interest and other income through interest charges
assessed on outstanding loans, loan servicing, leasing and other fees. The
Company's primary expenses are the costs of funding its loan business (including
interest paid on short-term and long-term debt), provisions for possible credit
losses, marketing expenses, salaries and employee benefits, servicing and other
operating expenses and income taxes.
The Company's current emphasis is on secured lending in the United States
to businesses in specific industry niches, where the Company's expertise in
evaluating the needs and credit worthiness of prospective customers enables it
to provide specialized financing services. The Company's strategy has been to
seek to maintain a high-quality portfolio, using clearly defined underwriting
standards in an effort to minimize the level of non-earning assets and
write-offs.
LINES OF BUSINESS
The Company's activities are conducted in eight areas:
- Corporate Finance. The corporate finance group provides financing
specifically for middle market businesses, including retail,
distribution, manufacturing/processing, services and industrial and
consumer products businesses. In Europe, the group has financed the
purchase by companies of new and used equipment for printing, civil
engineering, construction, machine tooling, textiles and transportation.
The group's lending is primarily in the form of term loans secured by the
assets of the borrower, with significant emphasis on cash flow as the
source of repayment of the secured loan. The Company's portfolio of
direct financing and leveraged equipment leases entered into prior to
1987 and predominately involving transportation equipment, is also
managed as part of the corporate finance portfolio.
- Transportation Finance. Through the transportation finance group, the
Company structures secured financings for specialized areas of the
transportation industry, principally involving domestic and foreign used
aircraft, as well as domestic short-line railroads and used rail
equipment.
- Communications Finance. The communications finance group specializes in
broadcast, cable television, print and outdoor media transactions in the
United States. The Company extends secured loans to communications
businesses requiring funds for recapitalization, acquisition or
refinancing.
- Commercial Real Estate Finance. The commercial real estate group
provides cash-flow-based financing primarily for acquisitions and
refinancings to experienced real estate developers and owner-tenants of
income-producing properties in the United States and prior to 1992, the
United Kingdom. The Company concentrates on secured financing
opportunities involving senior mortgage term loans on owner-occupied
commercial real estate. The Company's portfolio of real estate leveraged
leases is also managed as part of the commercial real estate portfolio.
- Resort Finance. The resort finance group lends primarily to the North
American recreational realty market by providing receivables-based
recourse financing to developers of major timeshare projects, second home
resort communities, golf resorts, resort hotels and similar recreational
developments. For some of these financings, the Company either purchases
consumer contract receivables or lends against these receivables,
depending on the structure required by the customer.
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- Asset Based Finance. The asset based finance group was acquired from
U.S. Bancorp in February 1993. It generally provides revolving lines of
credit and term loans to middle market businesses, secured by accounts
receivable, inventory, equipment and other assets.
- Consumer Rediscount Finance. The consumer rediscount group was
established in August 1993 to provide senior financing to independent
consumer finance companies. This type of financing is known as
rediscounting.
- Factoring. Through its recently acquired subsidiary, Ambassador Factors
Corp., the Company provides factoring and asset-based lending services.
Factoring involves the purchase of trade accounts receivable at a
discount, advancing funds against those purchased receivables. See
"Recent Development" below.
The Company's London-based consumer and commercial finance operations
ceased writing new business beginning in 1991. Although the Company continues to
administer and collect loans previously made, this portfolio has gradually
declined and as of year-end 1993 was approximately $124.3 million.
The Company was incorporated under the laws of Delaware in 1965 and is the
successor to a California corporation which commenced operations in 1954. The
principal executive offices of the Company are located at Dial Tower, 1850 N.
Central Avenue, Phoenix, Arizona 85004, and its telephone number is (602)
207-4900. All of the common stock of the Company is owned by GFC Financial
Corporation, the common stock of which is publicly traded on the New York Stock
Exchange ("GFC Financial"). GFC Financial owns substantially all of the
financial services businesses (principally the Company) previously owned by its
former parent, The Dial Corp.
RECENT DEVELOPMENT
On February 14, 1994, the Company acquired Fleet Factors Corp., operating
under the trade name Ambassador Factors ("Ambassador"), from Fleet Financial
Group, Inc. ("Fleet"). The purchase price of the acquisition was $257,085,000 in
cash and represented Ambassador's stockholder's equity plus a premium and
repayment of the intercompany balance due from Ambassador to Fleet. The Company
financed the acquisition with proceeds received from the GFC Financial's
discontinued mortgage insurance subsidiary and cash generated from operations
which was previously used to repay outstanding commercial paper.
RATIO OF INCOME TO FIXED CHARGES
The following table sets forth the Company's ratios of income to fixed
charges ("ratio") for each of the past five years and the nine months ended
September 30, 1993.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED ----------------------------------------
SEPTEMBER 30, 1993 1992 1991 1990 1989 1988
- ------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.40 1.35 -- 1.24 1.23 1.21
----- ---- ---- ---- ---- ----
----- ---- ---- ---- ---- ----
</TABLE>
Variations in interest rates generally do not have a substantial impact on
the ratio because the fixed-rate and floating-rate assets are generally matched
with liabilities of similar rate and term.
Income available for fixed charges, for purposes of the computation of the
ratio of income to fixed charges, consists of the sum of income before income
taxes (adjusted for the effect of reduced tax rates on income from leveraged
leases) and fixed charges. Fixed charges include interest and related debt
expense and a portion of rental expense determined to be representative of
interest.
For the year ended December 31, 1991, income to cover fixed charges was
inadequate to cover fixed charges by $35,256,000. This inadequacy was due to
certain restructuring and other charges of $65,000,000 and transaction costs of
$13,000,000 recorded in the fourth quarter of 1991 in connection with the
transfer by The Dial Corp to GFC Financial of its financial services and
insurance businesses, including the Company.
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USE OF PROCEEDS
Net proceeds from the sale of the Notes will be used to reduce the
Company's outstanding commercial paper.
DESCRIPTION OF NOTES
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of Securities" in the accompanying
Prospectus, to which description reference is hereby made. The Notes are to be
issued as a separate series of Securities under an Indenture dated as of
September 1, 1992 (the "Indenture"), between the Company and The Chase Manhattan
Bank, N.A., as Trustee. A copy of the Indenture has been filed as an exhibit to
the Registration Statement of which the accompanying Prospectus is a part.
GENERAL
The Notes will be limited to $100,000,000 aggregate principal amount and
will mature on February 15, 1996. The interest rate for each Interest Period
will be a rate of .25% per annum above the arithmetic mean of LIBOR (rounded if
necessary to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655)) for three-month U.S. dollar
deposits prevailing two London Business Days before the beginning of each
Interest Period, payable quarterly in arrears as described below under
"Interest," except that the interest rate on the Notes for the initial quarterly
Interest Period ending May 15, 1994 will be determined on February 23, 1994.
Interest on the Notes will be computed on the basis of the actual number of days
in the applicable Interest Period divided by 360. The Notes will not be
redeemable prior to maturity and will not be subject to any sinking fund.
"Business Day" means any day that is not a Saturday or Sunday, and that, in
The City of New York, is not a day on which banking institutions are generally
authorized or obligated by law to close.
"London Business Day" means a day on which dealings in deposits in United
States dollars are transacted in the London interbank market.
The "Interest Determination Date" pertaining to the beginning of an
Interest Period will be the second London Business Day preceding the Interest
Reset Date.
The "Interest Reset Date" means the first day of any Interest Period.
The Chase Manhattan Bank, N.A. shall be the "Calculation Agent" with
respect to the Notes. The Calculation Agent will notify the Company of each
determination of the interest rate applicable to the Notes promptly after such
determination is made. The Trustee will, upon the request of the holder of any
Note, provide the interest rate then in effect and, if different, the interest
rate which will become effective as a result of a determination made with
respect to the most recent Interest Determination Date.
INTEREST
The Notes will bear interest from February 25, 1994 payable quarterly in
arrears on each February 15, May 15, August 15, and November 15, commencing May
16, 1994 (each, an "Interest Payment Date"). If any Interest Payment Date would
otherwise be a day that is not a Business Day, payment of interest on such
Interest Payment Date will be postponed to the next day that is a Business Day.
The period from and including February 25, 1994 to but excluding the first
Interest Payment Date and each successive period from and including an Interest
Payment Date to but excluding the next Interest Payment Date is herein called an
"Interest Period." Interest on the Notes will be paid to the persons in whose
names the Notes are registered at the close of business on February 1, May 1,
August 1, and November 1, next preceding any Interest Payment Date.
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The rate of interest for each Interest Period shall be .25% per annum above
LIBOR determined by the Calculation Agent in accordance with the following
provisions:
(i) On each Interest Determination Date, LIBOR will be, the arithmetic
mean of the offered rates for three-month deposits in U.S. dollars
commencing on the second London Business Day immediately following such
Interest Determination Date, that appear on the Reuters Screen LIBO page as
of 11:00 a.m., London time, on such Interest Determination Date, if at
least two such offered rates appear on the Reuters Screen LIBO Page.
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks). If fewer than two offered rates
appear on the Reuters Screen LIBO Page, LIBOR in respect of such Interest
Determination Date will be determined as if the parties had specified the
rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page, LIBOR will
be determined on the basis of the rates at which three-month deposits in
U.S. dollars, commencing on the second London Business Day immediately
following such Interest Determination Date, in a principal amount that is
representative for a single transaction in such market at such time, are
offered at approximately 11:00 a.m., London time, on such Interest
Determination Date by four major banks in the London interbank market
selected by the Calculation Agent to prime banks in the London interbank
market. The Calculation Agent will request the principal London office of
each of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of such Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR in respect of such Interest Determination
Date, will be the arithmetic mean of the rates quoted by three major banks
in The City of New York (selected by the Calculation Agent) at
approximately 11:00 a.m., New York City time, on such Interest
Determination Date for loans in U.S. dollars to leading European banks,
commencing on the second London Business Day immediately following such
Interest Determination Date and in a principal amount that is
representative for a single transaction in such market at such time,
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as set forth above, LIBOR will be LIBOR
in effect on such Interest Determination Date.
GLOBAL NOTES, DELIVERY AND FORM
The Notes will be represented by one global security (the "Global
Security") and will be deposited with, or on behalf of, The Depository Trust
Company, in its capacity as depository (the "Depositary"). Except as set forth
below, the Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary to a
successor of the Depositary or a nominee of such successor.
So long as the Depositary or its nominee is the registered owner of a
Global Security, the Depositary or its nominee, as the case may be, will be the
sole Holder of the Notes represented thereby for all purposes under the
Indenture. Except as otherwise provided in this section, the Beneficial Owners
(as defined below) of the Global Security representing the Notes will not be
entitled to receive physical delivery of certificated Notes and will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing the Notes shall be exchangeable or transferrable.
Accordingly, each person owning a beneficial interest in a Global Security must
rely on the procedures of the Depositary and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest in order to exercise any rights of a Holder under the Indenture.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in certificated form. Such limits and
such laws may impair the ability to transfer beneficial interests in a Global
Security representing the Notes.
The following is based on information furnished by the Depositary:
The Depositary will act as securities depository for the Notes. The
Notes will be issued as fully registered securities registered in the name
of Cede & Co. (the Depositary's partnership nominee). One
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fully registered Global Security will be issued for the Notes, in the
aggregate principal of the Notes and will be deposited with the Depositary.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the
New York Banking Law, 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 pursuant to the provisions of Section
17A of Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain
other organizations. The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to the Depositary's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules
applicable to the Depositary and its Participants are on file with the
Securities and Exchange Commission.
Purchases of Notes under the Depositary's system must be made by or
through Direct Participants, which will receive a credit for such Notes on
the Depositary's records. The ownership interest of each actual purchaser
of each Note represented by the Global Security ("Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from the Depositary
of their purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participants
through which such Beneficial Owner entered into the transaction. Transfers
of ownership interests in the Global Security representing the Notes are to
be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners of the Global Security
representing the Notes will not receive certificated Notes representing
their ownership interests therein, except in the event that use of the
book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, the Global Security representing
the Notes which is deposited with the Depositary is registered in the name
of the Depositary's nominee, Cede & Co. The deposit of the Global Security
with the Depositary and its registration in the name of Cede & Co. effects
no change in beneficial ownership. The Depositary has no knowledge of the
actual Beneficial Owners of the Global Security representing the Notes; the
Depositary's records reflect only the identity of the Direct Participants
to whose accounts such Notes are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial Owners will
by governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with
respect to the Global Security representing the Notes. Under its usual
procedures, the Depositary mails an Omnibus Proxy to the Company as soon as
possible after the applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Notes are credited on the applicable record date (identified
in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Security representing
the Notes will be made to the Depositary. The Depositary's practice is to
credit Direct Participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not receive
payment on such date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the
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responsibility of such Participant and not of the Depositary, the Trustee
or the Company, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal, premium, if any, and
interest to the Depositary is the responsibility of the Company or the
Trustee, disbursement of such payments to Direct Participants shall be the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed within 90 days, the
Company will issue certificated Notes in exchange for the Notes represented by
the Global Security. In addition, the Company may at any time and in its sole
discretion determine to discontinue use of the Global Security and, in such
event, will issue definitive Notes in exchange for the Notes represented by the
Global Security. Notes so issued will be issued in denominations of $1,000 and
integral multiples thereof and will be issued in registered form only, without
coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments or principal and interest will be made by the
Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement System until maturity
or until the Notes are issued in the definitive form, and secondary market
trading activity in the Notes will therefore be required by the Depositary to
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in immediately available funds on trading activity
in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement") between the Company and Citicorp Securities, Inc., Lehman
Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriters"), the Company has agreed to sell to the Underwriters, and the
Underwriters have severally agreed to purchase, the respective principal amount
of the Notes set forth after their names below. The Purchase Agreement provides
that the obligations of the Underwriters are subject to certain conditions
precedent and that the Underwriters will be obligated to purchase all of the
Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------------------------------------------------------------------- ------------
<S> <C>
Citicorp Securities, Inc. ............................................. $ 34,000,000
Lehman Brothers Inc.................................................... 33,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................. 33,000,000
------------
Total............................................................. $100,000,000
------------
------------
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Notes to the public at the public offering set forth on the cover page
of this Prospectus Supplement, and to certain dealers at such price less a
concession not in excess of .2% of the principal amount. The Underwrites may
allow, and such dealers may reallow, a discount not in excess of .125% of the
principal of the Notes to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933. In
the ordinary course of their respective businesses, certain affiliates of
Citicorp Securities, Inc., one of the Underwriters, have engaged and may in the
future engage in commercial banking transactions with the Company.
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The Notes are a new issue of securities with no established trading market
and will not be listed on any national securities exchange. The Underwriters
have advised the Company that they may from time to time purchase and sell the
Notes in the secondary market, but that they are not obligated to do so. No
assurance can be given that there will be a secondary market for the Notes.
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PROSPECTUS
GREYHOUND FINANCIAL CORPORATION
SENIOR DEBT SECURITIES
Greyhound Financial Corporation ("Company" or "GFC") may offer from time to
time up to $750 million aggregate principal amount of its senior debt securities
("Securities") on terms to be determined at the time of sale. The Securities may
be issued in one or more series with the same or various maturities at or above
par or with an original issue discount and may be issued in fully registered
form or in the form of one or more global securities (each a "Global Security").
The specific designation, the aggregate principal amount, the maturity, the
purchase price, the rate (which may be fixed or variable) and time of payment of
any interest, any sinking fund, any terms of redemption at the option of the
Company or the holder, and other specific terms of the Securities in respect of
which this Prospectus is being delivered ("Offered Securities") are set forth in
an accompanying prospectus supplement ("Prospectus Supplement"), together with
the terms of offering of the Offered Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
The Offered Securities may be offered through underwriters, agents or
dealers. If underwriters are used, it is expected that the managing underwriters
will include Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Citicorp Securities, Inc., Goldman, Sachs & Co., Lehman Brothers,
Lehman Brothers Inc. and Salomon Brothers Inc. If an underwriter, agent or
dealer is involved in the offering of any Offered Securities, the underwriter's
discount, agent's commission or dealer's purchase price will be set forth in, or
may be calculated from, the Prospectus Supplement, and the net proceeds to the
Company from such offering will be the public offering price of the Offered
Securities less such discount in the case of an underwriter, the purchase price
of the Offered Securities less such commission in the case of an agent or the
purchase price of the Offered Securities in the case of a dealer, and less, in
each case, the other expenses of the Company associated with the issuance and
distribution of the Offered Securities. See "Plan of Distribution."
The date of this Prospectus is February 16, 1994.
<PAGE> 10
IN CONNECTION WITH AN OFFERING, THE UNDERWRITERS FOR SUCH OFFERING MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE OFFERED SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN
THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information can be
inspected and copied at Room 1024 at the public reference facilities maintained
by the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as
the Regional Offices of the Commission at Northwestern Atrium Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661-2511 and 7 World Trade
Center, New York, New York 10048, and copies can be obtained by mail from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at the prescribed rates. Reports and other information
concerning the Company can also be inspected at the office of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference are the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992, Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1993, June 30, 1993 and September 30, 1993 and
Current Reports on Form 8-K dated January 5, 1993, January 20, 1993, April 15,
1993, July 15, 1993, October 12, 1993, January 21, 1994 and February 14, 1994
filed pursuant to Section 13 of the Exchange Act, with the Commission.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Securities shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge upon written or oral request by any
person to whom this Prospectus is delivered a copy of any or all of the
documents described above which have been incorporated by reference in this
Prospectus, other than exhibits to such documents. Such request should be
directed to Robert J. Fitzsimmons, Vice President-Treasurer, Greyhound Financial
Corporation, Dial Tower, Phoenix, Arizona 85077, telephone number (602)
207-4900.
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<PAGE> 11
GREYHOUND FINANCIAL CORPORATION
Greyhound Financial Corporation, a Delaware corporation (the "Company"),
engages in the business of providing secured financing of selected commercial
and real estate activities in the United States and intermediate-term lending on
a secured basis in foreign countries. The Company accomplishes this through
secured loans and leases. The Company is in the process of winding down the
majority of its European operations.
The Company generates interest and other income through interest charges
assessed on outstanding loans, loan servicing, leasing and other fees. The
Company's primary expenses are the costs of funding its loan business (including
interest paid on short-term and long-term debt), provisions for possible credit
losses, marketing expenses, salaries and employee benefits, servicing and other
operating expenses and income taxes.
The Company's current emphasis is on secured lending in the United States
to businesses in specific industry niches, where the Company's expertise in
evaluating the needs and credit worthiness of prospective customers enables it
to provide specialized financing services. The Company's strategy has been to
seek to maintain a high-quality portfolio, using clearly defined underwriting
standards in an effort to minimize the level of non-earning assets and
write-offs.
LINES OF BUSINESS
The Company's activities are conducted in eight areas:
- Corporate Finance. The corporate finance group provides financing
specifically for middle market businesses, including retail,
distribution, manufacturing/processing, services and industrial and
consumer products businesses. In Europe, the group has financed the
purchase by companies of new and used equipment for printing, civil
engineering, construction, machine tooling, textiles and transportation.
The group's lending is primarily in the form of term loans secured by the
assets of the borrower, with significant emphasis on cash flow as the
source of repayment of the secured loan. The Company's portfolio of
direct financing and leveraged equipment leases entered into prior to
1987 and predominately involving transportation equipment, is also
managed as part of the corporate finance portfolio.
- Transportation Finance. Through the transportation finance group, the
Company structures secured financings for specialized areas of the
transportation industry, principally involving domestic and foreign used
aircraft, as well as domestic short-line railroads and used rail
equipment.
- Communications Finance. The communications finance group specializes in
broadcast, cable television, print and outdoor media transactions in the
United States. The Company extends secured loans to communications
businesses requiring funds for recapitalization, acquisition or
refinancing.
- Commercial Real Estate Finance. The commercial real estate group
provides cash-flow-based financing primarily for acquisitions and
refinancings to experienced real estate developers and owner-tenants of
income-producing properties in the United States and prior to 1992, the
United Kingdom. The Company concentrates on secured financing
opportunities involving senior mortgage term loans on owner-occupied
commercial real estate. The Company's portfolio of real estate leveraged
leases is also managed as part of the commercial real estate portfolio.
- Resort Finance. The resort finance group lends primarily to the North
American recreational realty market by providing receivables-based
recourse financing to developers of major timeshare projects, second home
resort communities, golf resorts, resort hotels and similar recreational
developments. For some of these financings, the Company either purchases
consumer contract receivables or lends against these receivables,
depending on the structure required by the customer.
- Asset Based Finance. The asset based finance group was acquired from
U.S. Bancorp in February 1993. It generally provides revolving lines of
credit and term loans to middle market businesses, secured by accounts
receivable, inventory, equipment and other assets.
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<PAGE> 12
- Consumer Rediscount Finance. The consumer rediscount group was
established in August 1993 to provide senior financing to independent
consumer finance companies. This type of financing is known as
rediscounting.
- Factoring. Through its recently acquired subsidiary, Ambassador Factors
Corp., the Company provides factoring and asset-based lending services.
Factoring involves the purchase of trade accounts receivable at a
discount, advancing funds against those purchased receivables.
The Company's London-based consumer and commercial finance operations
ceased writing new business beginning in 1991. Although the Company continues to
administer and collect loans previously made, this portfolio has gradually
declined and as of year-end 1993 was approximately $124.3 million.
The Company was incorporated under the laws of Delaware in 1965 and is the
successor to a California corporation which commenced operations in 1954. The
principal executive offices of the Company are located at Dial Tower, 1850 N.
Central Avenue, Phoenix, Arizona 85004, and its telephone number is (602)
207-4900. All of the common stock of the Company is owned by GFC Financial
Corporation, the common stock of which is publicly traded on the New York Stock
Exchange ("GFC Financial"). GFC Financial owns substantially all of the
financial services businesses (principally the Company) previously owned by its
former parent, The Dial Corp.
RATIO OF INCOME TO FIXED CHARGES
The following table sets forth the Company's ratios of income to fixed
charges ("ratio") for each of the past five years and the nine months ended
September 30, 1993.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS ENDED ----------------------------------------
SEPTEMBER 30, 1993 1992 1991 1990 1989 1988
- ------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.40 1.35 -- 1.24 1.23 1.21
---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ----
</TABLE>
Variations in interest rates generally do not have a substantial impact on
the ratio because the fixed-rate and floating-rate assets are generally matched
with liabilities of similar rate and term.
Income available for fixed charges, for purposes of the computation of the
ratio of income to fixed charges, consists of the sum of income before income
taxes (adjusted for the effect of reduced tax rates on income from leveraged
leases) and fixed charges. Fixed charges include interest and related debt
expense and a portion of rental expense determined to be representative of
interest.
For the year ended December 31, 1991, income to cover fixed charges was
inadequate to cover fixed charges by $35,256,000. This inadequacy was due to
certain restructuring and other charges of $65,000,000 and transaction costs of
$13,000,000 recorded in the fourth quarter of 1991 in connection with the
transfer by The Dial Corp to GFC Financial of its financial services and
insurance businesses, including the Company.
USE OF PROCEEDS
Unless otherwise indicated in a Prospectus Supplement with respect to the
proceeds from the sale of the particular Offered Securities to which such
Prospectus Supplement relates, the net proceeds to be received by the Company
from the sale of the Securities will be added to the Company's general funds and
are intended to be used for general corporate purposes, which may include
without limitation, the reduction of short-term debt or the refinancing of
long-term debt. Subject to the application by the Company of such net proceeds
to general corporate purposes or such other use set forth in such Prospectus
Supplement, the Company will hold such funds in trust.
DESCRIPTION OF SECURITIES
The Securities will be issued under an Indenture, dated as of September 1,
1992, as supplemented and amended from time to time (hereinafter called the
"Indenture"), between the Company and The Chase
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<PAGE> 13
Manhattan Bank, N.A., as Trustee (the "Trustee"). A copy of the Indenture is
filed as an exhibit to the Registration Statement. The following statements do
not purport to be complete and are subject to the detailed provisions of the
Indenture, to which reference is hereby made, including the definition of
certain terms used herein without definition.
GENERAL
The Securities offered by this Prospectus will be limited to $750,000,000
aggregate principal amount. Prior to the date of this Prospectus, the Company
has issued $200,000,000 aggregate principal amount of such Securities. The
Indenture does not limit the aggregate principal amount of Securities which may
be offered thereunder and provides that Securities may be issued in one or more
series, in each case as authorized from time to time by the Company. The
Securities will be unsecured general obligations of the Company and will not be
subordinated to any other general indebtedness of the Company. Reference is made
to the Prospectus Supplement together with any pricing supplement thereto
relating to the Offered Securities for the following terms thereof:
(1) the title of the Offered Securities;
(2) any limit upon the aggregate principal amount of the Offered
Securities;
(3) the date or dates on which the principal of the Offered Securities
shall be payable;
(4) the rate or rates (which may be fixed or variable) at which the
Offered Securities shall bear interest, or the method by which such rate or
rates shall be determined;
(5) the date or dates from which such interest shall accrue, or the
method by which such date or dates shall be determined, the dates on which
such interest shall be payable and any record dates therefor;
(6) the place or places where the principal of, premium, if any, and
interest on the Offered Securities shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Offered Securities may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem, purchase or
repay the Offered Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which the Offered Securities shall be redeemed, purchased or repaid
pursuant to such obligation;
(9) if other than the principal amount thereof, the percentage of the
principal amount of the Offered Securities payable upon declaration of
acceleration of the maturity of the Offered Securities;
(10) whether the Offered Securities are to be issued in whole or in
part in global form ("Global Securities") and, if so, the identity of the
Depositary for such Global Securities, and the terms and conditions, if
any, upon which interests in such Global Securities may be exchanged, in
whole or in part, for the individual Securities represented thereby;
(11) any deletions from, modifications of, or additions to the events
of default or covenants of the Company with respect to any of the Offered
Securities; and
(12) any other terms of the Offered Securities none of which shall be
inconsistent with the provisions of the Indenture (Section 2.02).
The Company may authorize the issuance and provide for the terms of a
series of Securities pursuant to a resolution of its Board of Directors or any
duly authorized committee thereof or pursuant to a supplemental indenture.
The Securities may be issued in registered form. Securities of a series may
be issued in whole or in part in the form of one or more Global Securities, as
described below under "Global Securities." Unless the Prospectus Supplement
relating thereto specifies otherwise, Securities will be issued only in
denominations of
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<PAGE> 14
$1,000 or any integral multiple thereof (Section 2.01). One or more Global
Securities will be issued in a denomination or denominations equal to the
aggregate principal amount of Outstanding Securities of the series to be
represented by such Global Security or Securities (Section 3.01).
Securities (other than a Global Security) may be presented for exchange and
registration of transfer (with the form of transfer endorsed thereon duly
executed) at the office of the Company designated for such purpose or at the
office of any transfer agent or at the office of any Security Registrar, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Securities may initially be presented for
registration of transfer or exchange at the Company's principal business office,
Dial Tower, Phoenix, Arizona 85077 and at the Principal Office of the Trustee at
4 Chase MetroTech Center, 3rd Floor, Brooklyn, New York 11245. Securities (other
than a Global Security) in the several denominations will be interchangeable
without service charge, but the Company may require payment to cover taxes or
other governmental charges. The Trustee initially will act as authenticating
agent under the Indenture (Sections 1.02, 2.05 and 5.02).
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, on Securities (other than a
Global Security) will be made against surrender of such Securities at the
Principal Office of the Trustee in The City of New York. Payment of any
installment of interest on Securities will be made to the person in whose name
such Security is registered at the close of business on the record date for such
interest. Unless otherwise indicated in the Prospectus Supplement, payments of
such interest will be made at the Principal Office of the Trustee in The City of
New York, or, at the option of the Company, by check mailed by first class mail
to registered holders of a Security at such holder's registered address
(Sections 2.01 and 5.02).
All moneys paid by the Company to a paying agent for the payment of
principal of or premium, if any, or interest on any Security that remain
unclaimed at the end of three years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and the holder
of such Security entitled to receive such payment will thereafter look only to
the Company for payment therefor (Section 11.03).
GLOBAL SECURITIES
The Securities of a series may be issued in whole or in part in the form of
one or more Global Securities that will be deposited with, or on behalf of, a
Depositary identified in the Prospectus Supplement relating to such series.
Global Securities may be issued in either temporary or permanent form. Unless
and until it is exchanged for Securities in definitive form, a Global Security
may not be transferred except as a whole by the Depositary for such Global
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor (Section 2.05).
The specific terms of the depositary arrangement with respect to a series
of Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will apply to any
depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Securities represented by such Global
Security. Such accounts shall be designated by the underwriters or agents with
respect to such Securities or by the Company if such Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the Depositary for
such Global Security or its nominee ("participants") or persons that may hold
interests through participants. Ownership of beneficial interests in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary for such Global Security or
by participants or persons that hold through participants. The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in a Global Security.
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<PAGE> 15
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Securities represented by
such Global Security for all purposes under the Indenture governing such
Securities. Except as set forth below, owners of beneficial interests in a
Global Security will not be entitled to have Securities of the series
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Securities of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture governing such Securities.
Payments of principal of, premium, if any, and interest, if any, on
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or the holder of the Global Security representing such Securities. None of
the Company, the Trustee for such Securities, any paying agent or the Security
Registrar for such Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for Securities of a series, upon
receipt of any payment of principal, premium, if any, or interest, if any, in
respect of a permanent Global Security, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of such Depositary. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with the securities held for the
accounts of customers in bearer form or registered in "street name," and will be
the responsibility of such participants. Receipt by owners of beneficial
interests in a temporary Global Security of payments in respect of such
temporary Global Security may be subject to restrictions. Any such restrictions
will be described in the Prospectus Supplement relating thereto.
If a Depositary for Securities of a series is at any time unwilling or
unable to continue as Depositary and a successor depositary is not appointed by
the Company within ninety days, the Company will issue Securities of such series
in definitive form in exchange for the Global Security or Securities
representing Securities of such series. In addition, the Company may at any time
and in its sole discretion determine not to have any Securities of a series
represented by one or more Global Securities and, in such event, will issue
Securities of such series in definitive form in exchange for the Global Security
or Securities representing Securities. Further, if the Company so specifies with
respect to the Securities of a series, each Person specified by the Depositary
of the Global Security representing Securities of such series may, on terms
acceptable to the Company and the Depositary for such Global Security, receive
Securities of such series in definitive form. In any such instance, each Person
so specified by the Depositary of the Global Security will be entitled to
physical delivery in definitive form of Securities of the series represented by
such Global Security equal in principal amount to such Person's beneficial
interest in the Global Security (Sections 2.05, 2.08 and 3.01).
CERTAIN DEFINITIONS
The following terms are defined substantially as follows in Section 1.02 of
the Indenture and are used herein as so defined. For the purposes of the
following terms, all items shall be determined in accordance with generally
accepted accounting principles, unless otherwise indicated.
"Consolidated Net Tangible Assets" means the total of all assets reflected
on a consolidated balance sheet of the Company and its consolidated
Subsidiaries, at their net book values (after deducting related depreciation,
depletion, amortization and all other valuation reserves which, in accordance
with generally accepted accounting principles, should be set aside in connection
with the business conducted), but excluding goodwill, unamortized debt discount
and all other like intangible assets, less the aggregate of the current
liabilities of the Company and its consolidated Subsidiaries reflected on such
balance sheet. For purposes of this definition, "current liabilities" include
all indebtedness for money borrowed, incurred, issued, assumed or guaranteed by
the Company and its consolidated Subsidiaries, and other payables and accruals,
in each case payable on demand or due within one year of the date of
determination of Consolidated Net Tangible Assets,
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<PAGE> 16
but shall exclude any portion of long-term debt maturing within one year of the
date of such determination, all as reflected on such consolidated balance sheet
of the Company and its consolidated Subsidiaries.
"Lien" means any lien, charge, security interest, right of another under
any conditional sale or other title retention agreement or any other encumbrance
affecting title to property, including any lease under a sale and leaseback
arrangement.
"Subsidiary" means any corporation a majority of the Voting Stock of which
is owned, directly or indirectly, by the Company or by one or more Subsidiaries
or by the Company and one or more Subsidiaries. "Restricted Subsidiary" is any
Subsidiary a majority of the Voting Stock of which is owned, directly, by the
Company or by one or more Restricted Subsidiaries or by the Company and one or
more Restricted Subsidiaries and which is designated as such by resolution of
the Board of Directors of the Company. "Unrestricted Subsidiary" means any
Subsidiary other than a Restricted Subsidiary.
"Voting Stock" means stock of any class or classes (however designated)
having ordinary voting power for the election of a majority of the members of
the board of directors (or any governing body) of such corporation, other than
stock having such power only by reason of the happening of a contingency.
LIMITATION ON LIENS
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, create, assume, incur or suffer to be created, assumed
or incurred or to exist any Lien upon any of the properties of any character of
the Company or any Restricted Subsidiary without making effective provision for
securing the Securities equally and ratably with any other obligation or
indebtedness so secured, other than: (i) leases of property in the ordinary
course of business or in the event that such property is not needed in the
operation of the business; (ii) Liens securing indebtedness incurred to finance
the acquisition of the property subject to the Lien, and in respect of which the
creditor has no recourse against the Company or any Restricted Subsidiary except
recourse to such property, or to the proceeds of any sale or lease of such
property or both; (iii) deposits with or security given to a governmental agency
as a condition to the transaction of business or the exercise of a privilege, or
made to enable the Company or a Restricted Subsidiary to maintain self-insurance
or participate in any fund in connection with worker's compensation,
unemployment insurance, old age pensions, or other social security, or as
collateral in connection with any bond on appeal by the Company or any
Restricted Subsidiary from any judgment or in connection with any other judicial
proceedings by or against the Company or any Restricted Subsidiary; (iv) Liens
for taxes or assessments which are not yet due or are payable without penalty or
are being contested in good faith and against which reserves deemed adequate by
the Company or a Restricted Subsidiary have been established, provided that
foreclosure or similar proceedings have not been commenced; (v) Liens of any
judgment, if such judgment shall not have remained undischarged, or unstayed on
appeal or otherwise, for more than six months; (vi) undetermined Liens or
charges incident to construction, mechanics' and other like Liens arising in the
ordinary course of business in respect of obligations which are not overdue or
which are being contested by the Company or any Restricted Subsidiary in good
faith, or deposits to obtain the release of such Liens; (vii) immaterial
encumbrances consisting of zoning restrictions, licenses, easements and
restrictions on the use of real property and minor defects and irregularities in
the title thereto; (viii) other immaterial (in the aggregate) Liens incidental
to the conduct of the Company's or any Restricted Subsidiary's business or the
ownership of its property other than for indebtedness; (ix) banker's liens and
rights of offset in the holders of indebtedness such as commercial paper in the
ordinary course of business; (x) leasehold or purchase rights, exercisable for a
fair consideration, in favor of any Person which arise in transactions entered
into in the ordinary course of business; (xi) Liens on property or shares of
stock of a corporation at the time the corporation becomes a Restricted
Subsidiary or merges into or consolidates with the Company or a Restricted
Subsidiary provided any such Lien is not incurred in anticipation of such
corporation becoming a Restricted Subsidiary or the related merger or
consolidation; (xii) Liens on property at the time the Company or a Restricted
Subsidiary acquires the property; (xiii) Liens in an amount not to exceed in the
aggregate $15,000,000 at any one time outstanding, excluding Liens covered by
clauses (i) through (xii) above; and (xiv) Liens securing the indebtedness of
the Company or a Restricted Subsidiary and the sum of the following does not
exceed 10% of Consolidated Net Tangible Assets: (a) such indebtedness plus (b)
other indebtedness
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<PAGE> 17
of the Company and its Restricted Subsidiaries secured by Liens on property of
the Company and its Restricted Subsidiaries, excluding indebtedness secured by a
Lien existing as of the date specified in the Indenture and excluding
indebtedness secured by a Lien permitted by one of clauses (i) through (xiii)
above. (Section 5.04).
CONSOLIDATION, MERGER, AND SALE OF ASSETS
The Indenture provides that the Company will not consolidate with, sell or
lease all or substantially all its assets to, or merge with or into any other
corporation, or purchase all or substantially all the assets of another
corporation, unless (i) the Company shall be the continuing corporation, or the
successor, transferee or lessee corporation is organized under the laws of the
United States of America or any state thereof and assumes the Company's
obligations under the Securities and the Indenture and (ii) immediately after
giving effect to such transaction, no default will have occurred and be
continuing. A purchase by a Subsidiary of all or substantially all of the assets
of another corporation shall not be deemed to be a purchase of such assets by
the Company (Section 5.06). Notwithstanding the foregoing, if, upon any such
consolidation or merger of the Company with or into any other corporation, or
upon any conveyance of the property of the Company as an entirety or
substantially as an entirety to any other corporation, any properties of any
character owned by the Company immediately prior thereto would thereupon become
subject to any Lien, simultaneously with such consolidation, merger or
conveyance, effective provision will be made to secure the Securities
outstanding equally and ratably with the debt secured by such Lien (Section
14.01).
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
without the consent of the holders of the Securities, to, among other things,
establish the form and terms of any series of the Securities issuable thereunder
by one or more supplemental indentures, and, with the consent of the holders of
not less than 66 2/3% in the aggregate principal amount of the Securities then
outstanding which are affected thereby, to modify and alter the terms of the
Indenture or any supplemental indenture or the rights of the holders of the
Securities of such series to be affected, except that no such modification or
alteration may be made which will (i) extend the fixed maturity of any
Securities, or reduce the rate or extend the time of payment of interest
thereon, or reduce the amount of the principal thereof, or reduce any premium
payable upon the redemption thereof, or make the principal thereof or interest
or premium thereon payable in any coin or currency other than that provided in
the Securities, or impair the right to institute suit for the enforcement of any
such payment on or after the maturity thereof, without the consent of the holder
of each Indenture Security so affected, or (ii) reduce the percentage of
Securities of any series, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of all the
Securities then outstanding, or (iii) modify, without the written consent of the
Trustee, the rights, duties or immunities of the Trustee (Sections 13.01 and
13.02).
DEFAULTS
The Indenture provides that events of default with respect to any series of
Securities will be (i) default for 30 days in payment of interest upon any
Indenture Security of such series; (ii) default in payment of principal (other
than on sinking fund redemption) or premium, if any, on any Indenture Security
of such series; (iii) default for 30 days in payment of any sinking fund
instalment when due by the terms of the Securities of such series; (iv) default,
for 90 days after written notice to the Company by the Trustee or the holders of
at least 25% in aggregate principal amount of the Securities of such series then
outstanding, in performance of any other covenant in the Indenture (other than a
covenant included in the Indenture solely for the benefit of a series of
Securities other than such series); (v) default under another instrument or in
respect of another series of Securities resulting in acceleration of maturity of
indebtedness of the Company in an amount exceeding $5,000,000 if such
acceleration is not rescinded or annulled, or such indebtedness shall not have
been discharged, within 10 days after written notice by the Trustee or the
holders of at least 10% in principal amount of the Securities of such series;
(vi) certain events in bankruptcy or insolvency; and (vii) the incurrence of any
other event of default with respect to Securities of such series (Section 6.01).
If an event of
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<PAGE> 18
default with respect to Securities of any series should occur and be continuing,
either the Trustee or the holders of 25% of the principal amount of outstanding
Securities of such series may declare each Indenture Security of that series due
and payable (Section 6.02). The Company will be required to file annually with
the Trustee a statement of an officer as to the fulfillment by the Company of
its obligations under the Indenture during the preceding year (Section 5.07).
Holders of a majority in principal amount of the outstanding Securities of
any series will be entitled to control certain actions of the Trustee under the
Indenture and to waive past defaults with respect to such series (Sections 6.02
and 6.06). Subject to the provisions of the Indenture relating to the duties of
the Trustee, the Trustee will not be under any obligation to exercise any of the
rights or powers vested in it by the Indenture at the request, order or
direction of any of the holders of Securities, unless one or more of such
holders of Securities shall have offered to the Trustee reasonable indemnity
(Section 10.01).
If an event of default occurs and is continuing with respect to a series of
Securities, any sums held or received by the Trustee under the Indenture may be
applied to reimburse the Trustee for its reasonable compensation and expenses
incurred prior to any payments to holders of Securities of such series (Section
6.05).
The right of any holder of Securities of any series to institute action for
any remedy is subject to certain conditions precedent, including a request to
the Trustee by the holders of not less than 25% in principal amount of the
Securities of that series outstanding to take action, and an offer to the
Trustee of reasonable indemnity against liabilities incurred by it in so doing
(Section 6.07).
DEFEASANCE
The Indenture provides that if, any time after the date of the Indenture,
the Company shall deposit with the Trustee, in trust for the benefit of the
holders thereof, (i) funds sufficient to pay, or (ii) such amount of direct
obligations of the United States of America as will or will together with the
income thereon without consideration of any reinvestment thereof be sufficient
to pay, all sums due for principal of, premium, if any, and interest on the
Securities of a particular series, as they shall become due from time to time,
and certain other conditions are met, the Trustee shall cancel and satisfy the
Indenture with respect to such series to the extent provided therein. Such
defeasance is conditioned upon the Company's delivery of an opinion of counsel
that the holders of the Securities of such series will have no federal income
tax consequences as a result of such deposit (Section 11.02).
CONCERNING THE TRUSTEE
The Trustee is one of the banks participating in one revolving credit
agreement with the Company. In addition, the Trustee acts as trustee with
respect to an Indenture dated as of June 1, 1985 (with respect to certain other
of the Company's Medium-Term Notes).
PLAN OF DISTRIBUTION
The Company may offer the Securities through underwriters, dealers or
agents.
If underwriters are used in the offering of Offered Securities, the names
of the managing underwriter or underwriters (expected to be or include Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citicorp
Securities, Inc., Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc.
and Salomon Brothers Inc) and any other underwriters, and the terms of the
transaction, including compensation of the underwriters and dealers, if any,
will be set forth in the Prospectus Supplement relating to such offering. Firms
not so named will have no direct or indirect participation in the underwriting
of such Offered Securities, although such a firm may participate in the
distribution of such Offered Securities under circumstances entitling it to a
dealer's allowance or agent's commission. It is anticipated that any
underwriting agreement pertaining to any Offered Securities will (1) entitle the
underwriters to indemnification by the Company against certain civil liabilities
under the Securities Act of 1933, as amended ("Securities Act"), (2) provide
10
<PAGE> 19
that the obligations of the underwriters will be subject to certain conditions
precedent, and (3) provide that the underwriters generally will be obligated to
purchase all such Offered Securities if any are purchased.
The Company also may sell Offered Securities to a dealer, as principal. In
such event, the dealer may then resell such Offered Securities to the public at
varying prices to be determined by such dealer at the time of resale. The name
of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offered Securities also may be offered through agents designated by the
Company from time to time. Any such agent will be named and the terms of any
such agency will be set forth, in the Prospectus Supplement or Pricing
Supplement relating thereto. Unless otherwise indicated in such Prospectus
Supplement or Pricing Supplement, any such agent will act on a best efforts
basis for the period of its appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Offered
Securities described therein and, under agreements which may be entered into
with the Company, may be entitled to indemnification by the Company against
certain civil liabilities under the Securities Act. Underwriters, dealers and
agents may engage in transactions with, or perform services for, the Company in
the ordinary course of business.
If so indicated in a Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
institutions to purchase the Offered Securities from the Company pursuant to
contracts providing for payment and delivery at a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will not
be subject to any conditions except that (1) the purchase of the Offered
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject and (2) if the Offered
Securities are also being sold to underwriters, the Company shall have sold to
such underwriters the Offered Securities not subject to delayed delivery.
The anticipated date of delivery of Offered Securities will be set forth in
the Prospectus Supplement relating to the Offering of such Securities.
LEGAL MATTERS
The legality of the Securities being offered hereby will be passed upon for
the Company by William J. Hallinan, Esq., General Counsel of GFC Financial
Corporation and counsel to the Company. Unless otherwise specified in an
applicable Prospectus Supplement, Brown & Wood will act as counsel for any
underwriters or agents.
EXPERTS
The financial statements of Greyhound Financial Corporation and
consolidated subsidiaries incorporated in this Prospectus by reference to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1992
are incorporated in reliance upon the report of Deloitte & Touche, independent
auditors, as experts in accounting and auditing.
11
<PAGE> 20
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND BY THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Greyhound Financial Corporation..... S-2
Ratio of Income to Fixed Charges.... S-3
Use of Proceeds..................... S-4
Description of Notes................ S-4
Underwriting........................ S-7
PROSPECTUS
Available Information............... 2
Incorporation of Certain Documents
by
Reference......................... 2
Greyhound Financial Corporation .... 3
Ratio of Income to Fixed Charges.... 4
Use of Proceeds..................... 4
Description of Securities........... 4
Plan of Distribution................ 10
Legal Matters....................... 11
Experts............................. 11
</TABLE>
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$100,000,000
[LOGO]
GREYHOUND FINANCIAL
CORPORATION
FLOATING RATE NOTES
DUE FEBRUARY 15, 1996
----------------------
PROSPECTUS SUPPLEMENT
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CITICORP SECURITIES, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
FEBRUARY 17, 1994
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