[GRAPHIC OMITTED]
Prospectus Supplement
(To Prospectus dated July 23, 1997)
- --------------------------------------------------------------------------------
$100,000,000 FINOVA Capital Corporation
6.25% Notes Due 1850 N. Central Avenue
August 15, 2000 P.O. Box 2209
Phoenix, Arizona 85002-2209
- --------------------------------------------------------------------------------
TERMS OF NOTES
* Interest paid on February 15 and * Global security held by The
August 15, accruing from the date Depository Trust Company,
we issue the Notes. generally.
* First interest payment date on * No redemption before maturity. No
February 15, 1998. sinking fund.
For more details, see "Note Terms" and "Description of the Securities."
TERMS OF SALE
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions FINOVA(2)
----------- ------------- -----------
Per Note ........... 99.924% 0.350% 99.574%
Total .............. $99,924,000 $350,000 $99,574,000
- ------------
(1) Plus accrued interest, if any, from date of issuance.
(2) Before expenses payable by us estimated at $150,000.
The Notes have not been approved or
disapproved by the SEC or any state
securities commission.
None of those authorities has
determined that the Prospectus or this
Supplement is accurate or complete.
Any representation to the contrary is Book entry delivery of Notes expected
a criminal offense. on October 2, 1997, subject to
conditions.
Deutsche Morgan Grenfell BancAmerica Securities, Inc.
September 29, 1997
<PAGE>
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, * Communications Finance
formerly known as Greyhound Financial
Corporation ("FINOVA" or "us"), is a * Corporate Finance
financial services company that
provides collateralized financing and * Factoring Services
leasing products to commercial
enterprises in focused market niches, * Franchise Finance
principally in the U.S. We concentrate
on lending to midsize businesses and * Healthcare Finance
have been in operation for over 42
years. * Inventory Finance
FINOVA extends revolving credit * Portfolio Services
facilities, term loans, and equipment
and real estate financing to * Public Finance
"middle-market" businesses with
financing needs falling generally * Rediscount Finance
between $500,000 and $35 million.
* Resort Finance
We operate in 15 specific industry
or market niches in which our * Transportation Finance
expertise in evaluating the
creditworthiness of prospective * FINOVA Investment Alliance
customers and our ability to provide
value-added services enable us to In September 1997, The FINOVA
differentiate ourselves from our Group Inc. announced its intention to
competitors. That expertise and purchase the operations of Belgravia
ability also enable us to command Capital Corporation. Belgravia is
product pricing that provides a engaged in commercial mortgage
satisfactory spread over our borrowing banking, which will constitute a new
costs. line of business for FINOVA when the
acquisition closes. We anticipate
FINOVA's principal lines of reaching a definitive agreement with
business are detailed more fully in Belgravia in early to mid-October. We
the Prospectus. Those lines include: expect to pay Belgravia or its
shareholder with stock of The FINOVA
* Commercial Equipment Finance Group Inc. or cash worth up to $90
million, plus three annual earn-out
* Commercial Finance payments or up to $30 million each.
* Commercial Real Estate Finance
S-2
<PAGE>
NOTE TERMS
The following description October 1, 1995, between us and The
supplements the "Description of the Bank of New York (as successor to
Securities" section in the Prospectus. First Interstate Bank of Arizona,
The Notes are to be issued as a N.A.), as Trustee.
separate series of securities under
the Indenture dated as of
<TABLE>
<S> <C>
Maximum Amount: $100,000,000 principal amount
Maturity: August 15, 2000
Interest Rate: 6.25% per year
Interest Payment Dates: February 15 and August 15, accruing from the date we issue the
Notes. First interest payment date is February 15, 1998.
Interest Calculations: Based on a 360-day year of twelve 30-day months
Redemption or Sinking Fund: None
Form of Note: One global security, held in the name of The Depository Trust
Company, generally
Settlement and Payment: Same-day -- immediately available funds
Secondary Trading Payments: Same-day -- immediately available funds
</TABLE>
UNDERWRITING
We have entered into an ment. They may offer the Notes to
Underwriting Agreement dated September certain dealers at that price less a
29, 1997 with Deutsche Morgan Grenfell concession of 0.250%. The Underwriters
Inc. and BancAmerica Securities, Inc., or those dealers may allow a discount
as Underwriters. The agreement of 0.150% on sales to certain other
provides that each Underwriter will dealers. After the initial public
purchase from us $50 million principal offering of the Notes, the
amount of the Notes and will purchase Underwriters may change the public
all of those Notes if any of the Notes offering price, concession to dealers
are purchased. They need not purchase and discount.
any Notes unless certain conditions
are satisfied. We have agreed to The Notes are a new issue of
indemnify the Underwriters against securities with no established trading
certain liabilities, including civil market. The Underwriters have advised
liabilities under the Securities Act us that they intend to act as market
of 1933, or to contribute to payments makers for the Notes. They are not
which the Underwriters may be required obligated to do so, however, and they
to make for those liabilities. may discontinue any market making at
any time without notice. Neither we
The Underwriters advise us that nor the Underwriters can assure the
they propose to offer the Notes to the liquidity of any trading market for
public initially at the offering price the Notes.
set forth on the cover page of this
Supple-
S-3
<PAGE>
Prospectus FINOVA(R)
- ----------
FINOVA(R) CAPITAL CORPORATION
Senior Debt Securities
We may offer from time to time the securities in one or more series,
under this Prospectus up to $1.5 with the same or various maturities,
billion principal amount of our senior at or above par or with original issue
debt securities ("securities") on discount, and in fully registered form
terms to be determined at the time of or the form of one or more global
sale. We may issue securities.
Prospectus Supplement
The Supplement to the Prospectus add, update or change information
for each offering of securities will contained in this Prospectus. It is
contain the specific information and important that you read both this
terms for that offering. The Prospectus and the Supplement before
Supplement may also you invest.
----------------
The securities have not been approved
or disapproved by the SEC or any state
securities commission.
None of those authorities has We may offer the securities directly
determined that this Prospectus is or through underwriters, agents or
accurate or complete. dealers. The Supplement will describe
the terms of that plan of
Any representation to the contrary is distribution. "Plan of Distribution"
a criminal offense. below also provides more information
on this topic.
July 23, 1997
<PAGE>
Certain persons participating in this offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities offered
under this Prospectus. Those transactions include over-allotment, stabilizing
transactions, short covering transactions and penalty bids. For a description of
those activities, see "Plan of Distribution" in the Prospectus. If begun, they
may discontinue those activities at any time.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and Securities Exchange Act of 1934 until
current reports, proxy statements and this offering is completed:
other information with the SEC. You
may read and copy any document we file * Annual Report of Form 10-K for
at the SEC's public reference rooms in the year ended December 31,
Washington, D.C., New York, New York 1996.
and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for more * Portions of our Proxy Statement
information on the public reference on Schedule 14A for the Annual
rooms and their copy charges. Our SEC Meeting of Shareholders held on
filings are also available to the May 8, 1997 that have been
public from the SEC's web site at incorporated by reference into
http://www.sec.gov. You may also our 10-K.
inspect our SEC reports and other
information at the New York Stock * Quarterly Report on Form 10-Q
Exchange, 20 Broad Street, New York, for the quarter ended March 31,
New York 10005. 1997.
The SEC allows us to "incorporate * Current Reports on Form 8-K
by reference" the information we file dated April 18, and July 16,
with them, which means we can disclose 1997.
information to you by referring you to
those documents. Information
incorporated by reference is part of You may request a copy of those
this Prospectus. Later information filings, other than exhibits, at no
filed with the SEC updates and cost, by contacting us at:
supersedes this Prospectus.
Treasurer
We incorporate by reference the FINOVA Capital Corporation
documents listed below and any future 1850 N. Central Avenue
filings made with the SEC under P.O. Box 2209
Sections 13(a), 13(c), 14 or 15(d) of Phoenix, Arizona 85002-2209
the (602) 207-6900
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, to provide value-added services enable
formerly known as Greyhound Financial us to differentiate ourselves from our
Corporation ("FINOVA" or "us"), is a competitors. That expertise and
financial services company that ability also enable us to command
provides collateralized financing and product pricing that provides a
leasing products to commercial satisfactory spread over our borrowing
enterprises in focused market niches, costs.
principally in the U.S. We concentrate
on lending to midsize businesses and We seek to maintain a high quality
have been in operation for over 42 portfolio and to minimize non-earning
years. assets and write-offs. We use clearly
defined underwriting criteria and
FINOVA extends revolving credit stringent portfolio management
facilities, term loans, and equipment techniques. We diversify our lending
and real estate financing to activities geographically and among a
"middle-market" businesses with range of industries, customers and
financing needs falling generally loan products.
between $500,000 and $35 million.
Due to the diversity of our
We operate in 15 specific industry portfolio, we believe we are better
or market niches in which our able to manage competitive changes in
expertise in evaluating the our markets and to withstand the
credit-worthiness of prospective impact of de-
customers and our ability
2
<PAGE>
teriorating economic conditions on a * Factoring Services offers full
regional or national basis. There can service factoring and accounts
be no assurance, however, that receivable management services
competitive changes, borrowers' for entrepreneurial and larger
performance, economic conditions or firms, primarily in the textile
other factors will not result in an and apparel industries. The
adverse impact on our results of annual factored volume of these
operations or financial condition. companies is generally between
$5 million and $25 million. This
FINOVA generates interest and line provides accounts
other income through charges assessed receivable and inventory
on outstanding loans, loan servicing, financing and loans secured by
leasing and other fees. Our primary equipment and real estate.
expenses are the costs of funding our
loan and lease business, including * Franchise Finance offers
interest paid on debt, provisions for equipment, real estate and
possible credit losses, marketing acquisition financing for
expenses, salaries and employee operators of established
benefits, servicing and other franchise concepts. Transaction
operating expenses and income taxes. sizes generally range from
$500,000 to $15 million.
Lines of Business * Healthcare Finance offers a full
range of working capital,
We operate the following principal equipment and real estate
lines of business: financing products for the U.S.
health care industry.
* Commercial Equipment Finance Transaction sizes typically
offers equipment leases, loans range from $500,000 to $25
and "turnkey" financing to a million.
broad range of midsize
companies. Specialty markets * Inventory Finance provides
include the corporate aircraft inbound and outbound inventory
and emerging growth technology financing, combined
industries, primarily inventory/accounts receivable
biotechnology and electronics. lines of credit and purchase
Typical transaction sizes range order financing for equipment
from $500,000 to $15 million. distributors, value-added
resellers and dealers
* Commercial Finance offers nationwide. Transaction sizes
collateral-oriented revolving generally range from $500,000 to
credit facilities and term loans $30 million.
for manufacturers, distributors,
wholesalers and service * Portfolio Services provides
companies. Typical transaction customized receivable servicing
sizes range from $500,000 to $3 and collections for timeshare
million. developers and other generators
of consumer receivables.
* Commercial Real Estate Finance
provides term financing for * Public Finance provides
hotel, anchored retail, office tax-exempt term financing to
and owner-occupied properties. state and local governments and
Typical transaction sizes range non-profit corporations. Typical
from $5 million to $25 million. transaction sizes range from
$100,000 to $5 million.
* Communications Finance
specializes in term financing to * Rediscount Finance offers
advertising and subscriber- revolving credit facilities to
supported businesses including the independent consumer finance
radio and television stations, industry including sales,
cable operators, outdoor automobile, mortgage and premium
advertising firms and finance companies. Typical
publishers. Typical transaction transaction sizes range from $1
sizes range from $1 million to million to $40 million.
$40 million.
* Resort Finance focuses on
* Corporate Finance provides a construction, acquisition and
full range of cash flow-oriented receivables financing of
and asset-based term and timeshare resorts worldwide as
revolving loan products for well as term financing for
manufacturers, wholesalers, established golf resort hotels
distributors, specialty and receivables funding for
retailers, and commercial and developers of second home
consumer service businesses. communities. Typical transaction
Typical transaction sizes range sizes range from $5 million to
from $2 million to $40 million. $35 million.
* Transportation Finance
structures equipment loans,
leases, acquisition financing
and leveraged lease equity
investments for com-
3
<PAGE>
mercial and cargo airlines FINOVA Capital Corporation, a
worldwide, railroads and Delaware corporation, was
operators of other incorporated in 1965 and is the
transportation related successor to a California corporation
equipment. Typical transaction that was formed in 1954. Our principal
sizes range from $5 million to executive offices are located at 1850
$30 million. N. Central Avenue, P.O. Box 2209,
Phoenix, Arizona 85002-2209. Our
* FINOVA Investment Alliance telephone number is (602) 207-6900.
provides equity and mezzanine All of our capital stock is owned by
debt financing for midsize The FINOVA Group Inc. whose stock is
businesses in partnership with traded on the New York Stock Exchange.
institutional investors and
selected fund sponsors. Typical
transaction sizes range from $2
million to $15 million.
RATIO OF INCOME TO FIXED CHARGES
Three
Months
Ended
March 31, Year Ended December 31,
- --------- ----------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- Income available for fixed charges,
1.54 1.50 1.44 1.58 1.50 1.37 for purposes of computing the above
ratios, consists of income from
Variations in interest rates generally continuing operations before income
do not have a substantial impact on taxes plus fixed charges. Fixed
the ratio because fixed-rate and charges consist of interest and
floating-rate assets are generally related debt expense, and a portion of
matched with liabilities of similar rental expense determined to be
rate and term. representative of interest.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained our efforts to implement our business
in this Prospectus and any strat- egy, the effect of economic
Supplements, including information conditions, the performance of our
incorporated by reference, discuss borrowers, actions of our competitors
future expectations, contain and our ability to respond to those
projections of results of operation or actions, the cost of our capital,
financial condition or state other which may depend in part on our
forward-looking information. Known and portfolio quality, ratings, prospects
unknown risks, uncertainties and other and outlook, changes in governmental
factors could cause the actual results regulation, tax rates and similar
to differ materially from those matters, the results of litigation,
contemplated by those statements. The the ability to attract and retain
forward-looking information is based quality employees and other risks
on various factors and was derived detailed in our other filings with the
using numerous assumptions. SEC. We do not promise to update
forward-looking information to reflect
Important factors that may cause actual results or changes in
the actual results to differ include, assumptions or other factors that
without limitation, the results of could affect those statements.
USE OF PROCEEDS
We intend to use the net proceeds ness, working capital, investment in
from the sale of the securities for financing transactions and capital
general corporate purposes. Those expenditures. We will describe in the
purposes include the repayment or Supplement any proposed use of
refinancing of debt, acquisitions in proceeds other than for general
the ordinary course of busi- corporate purposes.
4
<PAGE>
DESCRIPTION OF THE SECURITIES
We will issue the securities under * Any other terms consistent with
an Indenture dated as of October 1, the Indenture.
1995, as supplemented and amended from
time to time, between us and The Bank We may authorize and determine the
of New York (formerly First Interstate terms of a series of securities by
Bank, N.A.), as Trustee. The Indenture resolution of our board of directors
is filed as an exhibit to the or one of its committees or through a
registration statement of which this supplemental indenture.
Prospectus is a part. To obtain a copy
of the Indenture, see "Where You Can
Find More Information." The following Form of Securities
description is a brief summary of and
is subject to all the terms of the The securities will be issued in
Indenture. registered form. Unless the Supplement
otherwise provides, securities will be
issued as one or more global
General securities. This means that we will
not issue certificates to each holder.
The securities offered by this We will generally issue global
Prospectus will be limited to $1.5 securities in the total principal
billion principal amount. The amount of the securities distributed
Indenture does not limit the amount of in that series. We will issue
securities we could offer under it. We securities only in denominations of
can issue securities in one or more $1,000 or integral multiples of that
series, in each case as authorized by amount, unless the Supplement states
us from time to time. Each series may otherwise.
differ as to their terms. The
securities will be our unsecured
general obligations and will not be Global Securities
subordinated to our other general
indebtedness. In General. Securities in global
form will be deposited with or on
The Supplement will address the behalf of a depositary. Global
following terms of the securities: securities are represented by one or
more global certificates for the
* Their title. series registered in the name of the
depositary or its nominee. Securities
* Any limits on the principal in global form may not be transferred
amounts to be issued. except as a whole among the
depositary, a nominee of or a
* The dates on which the principal successor to the depositary and any
is payable. nominee of that successor. Unless
otherwise identified in the
* The rates (which may be fixed or Supplement, the depositary will be The
variable) at which they shall Depositary Trust Company.
bear interest, or the method for
determining rates. No Depositary or Global
Securities. If a depositary for a
* The dates from which the series is unwilling or unable to
interest will accrue and will be continue as depositary, and a
payable, or the method of successor is not appointed by us
determining those dates, and any within 90 days, we will issue
record dates for the payments securities of that series in
due. definitive form in exchange for the
global security or securities of that
* Any provisions for redemption at series. We may also determine at any
our option or otherwise, time in our discretion not to use
including the periods, prices global securities for any series. In
and terms of redemption. that event, we will issue securities
in definitive form.
* Any sinking fund or similar
provisions, whether mandatory or Ownership of the Global
at the holder's option, along Securities/Beneficial Ownership. So
with the periods, prices and long as the depositary or its nominee
terms of redemption, purchase or is the registered owner of a global
repayment. security, that entity will be the sole
holder of the securities represented
* The amount or percentage payable by that instrument. FINOVA and the
if we accelerate their maturity, Trustee are only required to treat the
if other than the principal depositary or its nominee as the legal
amount. owner of those securities for all
purposes under the Indenture.
* Any changes to the events of
default or covenants set forth Each actual purchaser of
in the Indenture. securities represented by a global
security (a "beneficial owner") will
not be entitled to receive physical
delivery of certificated securities,
will not be considered the holders of
those
5
<PAGE>
securities for any purpose under the transactions through or maintaining a
Indenture, and will not be able to custodial relationship with direct
transfer or exchange the global participants, either directly or
securities, unless this Prospectus or indirectly. The rules applicable to
the Supplement provide to the DTC and its participants are on file
contrary. As a result, each beneficial with the SEC.
owner must rely on the procedures of
the depositary to exercise any rights DTC Activities. DTC holds
of a holder under the Indenture. In securities that its participants
addition, if the beneficial owner is deposit with it. DTC also facilitates
not a direct or indirect participant the settlement among participants of
in the depositary (each a securities transactions, such as
"participant"), the beneficial owner transfers and pledges, in deposited
must rely on the procedures of the securities through electronic
participant through which it owns its computerized book-entry changes in
beneficial interest in the global participant's accounts. Doing so
security. eliminates the need for physical
movement of securities certificates.
The laws of some jurisdictions
require that certain purchasers of Participant's Records. Except as
securities take physical delivery of otherwise provided in this Prospectus
the securities in certificated form. or a Supplement, purchases of the
Those laws and the above conditions securities must be made by or through
may impair the ability to transfer direct participants, which will
beneficial interests in the global receive a credit for the securities on
securities. the depositary's records. The
beneficial owner's ownership interest
is in turn to be recorded on the
The Depository Trust Company direct and indirect participant's
records. Beneficial owners will not
The following is based on receive written confirmations from the
information furnished by The depositary of their purchase, but they
Depository Trust Company ("DTC") and are expected to receive them, along
applies to the extent it is the with periodic statements of their
depositary, unless otherwise stated in holdings, from the direct or indirect
a Supplement: participants through whom they entered
into the transaction.
Registered Owner. The securities
will be issued as fully registered Transfers of interests in the
securities in the name of Cede & Co. global securities will be made on the
(DTC's partnership nominee). One fully books of the participants on behalf of
registered global security generally the beneficial owners. Certificates
will be issued for each $200 million representing the interest of the
principal amount of securities. The beneficial owners in the securities
Trustee will deposit the global will not be issued unless the use of
securities with the depositary. The global securities is suspended as
deposit of the global securities with provided above.
DTC and its registration in the name
of Cede & Co. will not change the The depositary has no knowledge of
beneficial ownership of the the actual beneficial owners of the
securities. global securities. Its records only
reflect the identity of the direct
DTC Organization. The Depository participants as owners of the
Trust Company is a limited-purpose securities. Those participants may or
trust company organized under the New may not be the beneficial owners.
York Banking Law, a "banking Participants are responsible for
organization" within the meaning of keeping account of their holdings on
that law, a member of the Federal behalf of their customers.
Reserve System, a "clearing
corporation" within the meaning of the Notices Among the Depositary,
New York Uniform Commercial Code, and Participants and Beneficial Owners.
a "clearing agency" registered under Notices and other communications by
the provisions of Section 17A of the the depositary, its participants and
Securities Exchange Act of 1934, as the beneficial owners will be governed
amended. by arrangements among them, subject to
any legal requirements in effect.
DTC is owned by a number of its
direct participants and by the New Voting Procedures. Neither DTC nor
York Stock Exchange, Inc., the Cede & Co. will consent or vote with
American Stock Exchange, Inc. and the respect to the global securities. The
National Association of Securities depositary generally mails an omnibus
Dealers, Inc. Direct participants proxy to us just after the applicable
include securities brokers and record date. That proxy assigns Cede &
dealers, banks, trust companies, Co.'s consenting or voting rights to
clearing corporations and certain the direct participants to whose
other organizations who directly accounts the securities are credited
participate in DTC (each a "direct at that time.
participant"). Other entities
("indirect participants") may access
DTC's system by clearing
6
<PAGE>
Payments. Principal and interest above, by check mailed by first class
payments made by us will be delivered mail to the registered holders at
to the depositary. DTC's practice is their registered address or by wire
to credit direct participants' transfer to an eligible account of the
accounts on the applicable payment registered holder.
date unless it has reason to believe
it will not receive payment on that If any payments of principal,
date. Payments by participants to premium or interest are not claimed
beneficial owners will be governed by within three years of the date the
standing instructions and customary payment became due, those funds are to
practices, as is the case with be repaid to us. The beneficial owners
securities held for customers in of those interests will thereafter
bearer form or registered in "street look only to us for payment for those
name." Those payments will be the amounts.
responsibility of that participant,
not the depositary, the Trustee or us,
subject to any legal requirements in Certain Indenture Provisions
effect at that time.
Certain Definitions. The following
We are responsible for payment of is a summary of certain terms defined
principal, interest and premium, if in the Indenture. Those terms shall be
any, to the Trustee, who is determined in accordance with
responsible to pay it to the generally accepted accounting
depositary. The depositary is principles, unless otherwise
responsible for disbursing those indicated.
payments to direct participants. The
participants are responsible for "Consolidated Net Tangible Assets"
disbursing payments to the beneficial means the total of all assets
owners. reflected on the most recent quarterly
or annual consolidated balance sheet
of us and our consolidated
Transfer or Exchange of Securities Subsidiaries, at their net book values
(after deducting related depreciation,
You may transfer or exchange the depletion, amortization and all other
securities (other than a global valuation reserves), less the
security) without service charge at aggregate of our current liabilities
our office designated for that purpose and those of our consolidated
or at the office of any transfer agent Subsidiaries reflected on that balance
or security registrar identified under sheet. We exclude from assets
the Indenture. You must execute a goodwill, unamortized debt discount
proper form of transfer and pay any and all other like intangible assets.
taxes and other governmental charges For purposes of this definition,
resulting from that action. You may "current liabilities" include all
transfer or exchange the securities indebtedness for money borrowed,
other than a global security initially incurred, issued, assumed or
at our offices at 1850 N. Central guaranteed by us and our consolidated
Avenue, P.O. Box 2209, Phoenix, Subsidiaries, and other payables and
Arizona 85002-2209 or at our office or accruals, in each case payable on
agency established for that purpose in demand or due within one year of the
New York, New York. date of determination, but shall
exclude any portion of long-term debt
Securities in the several maturing within one year of that date
denominations will be interchangeable of determination, all as reflected on
without service charge, but we may the consolidated balance sheet of us
require payment to cover taxes and and our consolidated Subsidiaries.
other governmental charges. The
Trustee will initially act as "Lien" means any lien, charge,
authenticating agent under the claim, security interest, pledge,
Indenture. hypothecation, right of another under
any conditional sale or other title
retention agreement or any other
Same-Day Settlement and Payment encumbrance affecting title to
property. Lien includes any lease
Unless the Supplement otherwise under a sale and leaseback
provides, the securities will be arrangement.
settled in immediately available
funds. We will make payments of "Subsidiary" means any corporation
principal and interest in immediately a majority of the Voting Stock of
available funds. which is owned, directly or
indirectly, by us or by one or more
Payment and Paying Agent Subsidiaries or by us and one or more
Subsidiaries.
If the securities are not held in
global form, we will make payment of "Restricted Subsidiary" is any
principal and premium, if any, against Subsidiary a majority of the Voting
surrender of the securities at the Stock of which is owned, directly, by
principal office of the Trustee in New us or by one or more Restricted
York, New York. We will pay any Subsidiaries or by us and one or more
installment of interest on securities Restricted Subsidiaries and which is
to the record holder on the record designated as such by resolution of
date for that interest. We can make our Board of Directors.
those payments through the Trustee, as
noted
7
<PAGE>
"Unrestricted Subsidiary" means * Banker's liens and set off
any Subsidiary other than a Restricted rights in the ordinary course of
Subsidiary. business.
"Voting Stock" means stock of any * Leasehold or purchase rights,
class or classes (however designated) exercisable for fair
having ordinary voting power for the consideration, arising in the
election of a majority of the members ordinary course of business.
of the board of directors (or any
governing body) of that corporation, * Liens on property or securities
other than stock having that power existing when an entity becomes
only by reason of the happening of a a Restricted Subsidiary or
contingency. merges with us or a Restricted
Subsidiary, provided it is not
Limitation on Liens. The Indenture incurred in anticipation of
provides that FINOVA and its those events.
Restricted Subsidiaries will not
create, assume, incur or allow to be * Liens on property or securities
created, assumed or incurred or to existing at the time of
exist any Lien on any of our or their acquisition.
properties unless we secure the
securities equally and ratably with * Liens in a total amount less
any other obligation so secured. The than $25 million, excluding
Indenture contains the following Liens covered by the exceptions
exceptions to that prohibition: noted above.
* Leases of property in the * Liens securing indebtedness of
ordinary course of business or us or a Restricted Subsidiary
if the property is not needed in provided those and similar Liens
the operation of our business. on indebtedness do not exceed
10% of Consolidated Net Tangible
* Purchase money security Assets, excluding certain
interests that are non-recourse preexisting indebtedness and
to us or our Restricted those Liens permitted above.
Subsidiaries except to the
extent of the property so Merger, Consolidation and Sale of
acquired or any proceeds from Assets. We can not merge with or into,
that property, or both. consolidate with, sell or lease all or
substantially all of our assets to, or
* Governmental deposits or purchase all or substantially all the
security as a condition to the assets of another corporation unless
transaction of business or the we will be the surviving corporation
exercise of a privilege, or to or the successor is incorporated in
maintain self-insurance, or to the U.S. and assumes all of our
participate in any fund in obligations under the securities and
connection with worker's the Indenture, provided that
compensation, unemployment immediately after that transaction, no
insurance, pensions, social default will exist. A purchase by a
security, or for appeal bonds. Subsidiary of all or substantially all
the assets of another corporation will
* Liens for taxes or assessments not be a purchase of those assets by
not yet due or which are payable us. If, however, any of the
without a penalty or are being transactions noted in this paragraph
contested in good faith and with occurs and results in a Lien on any of
adequate reserves, so long as our properties (except as permitted
foreclosure or similar above), we must simultaneously secure
proceedings are not commenced. the securities equally and ratably
with the debt secured by that Lien.
* Judgment Liens that have not
remained undischarged or Modification of the Indenture.
unstayed for more than 6 months. FINOVA and the Trustee may amend the
Indenture without consent of the
* Incidental or undetermined holders of securities to do certain
construction, mechanics or things, such as establishing the form
similar Liens arising in the and terms of any series of securities.
ordinary course of business We must obtain consent of holders of
relating to obligations not at least two-thirds of the outstanding
overdue or which are being securities affected by a change to
contested by us or a Restricted amend the terms of the Indenture or
Subsidiary in good faith and any supplemental indenture or the
deposits for release of such rights of the holders of those
Liens. securities.
* Zoning restrictions, licenses, Unanimous consent is required for
easements and similar changes to extend the fixed maturity
encumbrances or defects if of any securities, reduce the
immaterial. principal, redemption premium or rate
of interest, extend the time of
* Other Liens immaterial in the payment of interest, change the form
aggregate incidental to our or
the Restricted Subsidiary's
business or property, other than
for indebtedness.
8
<PAGE>
of currency or to limit the right to obligation to exercise any of the
sue for payment on or after maturity rights or powers vested in it by
of the securities. Unanimous consent the Indenture at the request,
is also required to reduce the level order or direction of any holder
of consents needed to approve any such unless one or more of them shall
change. The Trustee must consent to have offered reasonable indemnity
changes modifying its rights, duties to the Trustee.
or immunities.
If an event of default occurs
Defaults. Events of default under and is continuing, the Trustee may
the Indenture for any series are: reimburse itself for its
reasonable compensation and
* Failure for 30 days to pay expenses incurred out of any sums
interest on any securities of held or received by it before
that series. making any payments to the holders
of the securities of the defaulted
* Failure to pay principal (other series.
than sinking fund redemptions)
or premium, if any, on The right of any holders of
securities of that series. securities of a series to commence
an action for any remedy is
* Failure for 30 days to pay any subject to certain conditions,
sinking fund installment on that including the requirement that the
series. holders of at least 25% of that
series request that the Trustee
* Violation of a covenant under take such action, and offer
the Indenture pertaining to that reasonable indemnity to the
series that persists for at Trustee against its liabilities
least 90 days after we are incurred in doing so.
notified by the Trustee or the
holders of 25% of the series.
Defeasance
* Default in other instruments or
under any other series of We may defease the securities of a
securities resulting in series, meaning we would satisfy our
acceleration of indebtedness duties under that series before
over $15 million, unless that maturity. We may do so by depositing
default is rescinded or with the Trustee, in trust for the
discharged within 10 days after benefit of the holders, either enough
written notice by the Trustee or funds to pay, or direct U.S.
the holders of 10% of that government obligations that, together
series. with the income on those obligations
(without considering any
* Bankruptcy, insolvency or reinvestment), will be sufficient to
similar event. pay, the obligation of that series,
including principal, premium, if any,
* Any other event of default with and interest. Certain other conditions
respect to the securities of must be met before we may do so. We
that series. must deliver an opinion of counsel
that the holders of that series will
If an event of default occurs have no Federal income tax
and continues, the Trustee or the consequences as a result of that
holders of at least 25% of the deposit.
series may declare those
securities due and payable. We are
required to certify to the Trustee Concerning the Trustee
annually as to our compliance with
the Indenture. The Trustee is one of the banks in
one of our credit agreements and from
Holders of a majority of a time to time may perform other
series may control certain actions banking, trust or related services on
of the Trustee and may waive past behalf of FINOVA or our customers.
defaults for that series. Except
as provided in the Indenture, the
Trustee will not be under any
PLAN OF DISTRIBUTION
We may offer the securities We anticipate that any
directly or through underwriters, underwriting agreement will entitle
dealers or agents. The Supplement will the underwriters to indemnity against
identify those underwriters, dealers certain civil liabilities under the
or agents and will describe that plan Federal securities laws and other
of distribution. Firms not so named laws, provide that their obligations
will have no direct or indirect to purchase the securities will be
participation in any underwriting of subject to certain conditions, and
those securities, although a firm may generally require them to purchase all
participate in the distribution of of the securities if any are
securities under circumstances purchased.
entitling it to a dealer's allowance
or agent's commission. Unless otherwise noted in the
Supplement, the securities will be
offered by the underwriters, if any,
9
<PAGE>
when, as and if issued by us, Any underwriter may engage in
delivered to and accepted by the over-allotment, stabilizing
underwriters and subject to their transactions, short covering
right to reject orders in whole or in transactions and penalty bids in
part. accordance with Regulation M under the
Securities Exchange Act of 1934.
We may sell securities to dealers, Over-allotment involves sales in
as principals. Those dealers may then excess of the offering size, which
resell the securities to the public at creates a short position. Stabilizing
varying prices set by those dealers transactions permit bids to purchase
from time to time. the underlying security so long as the
stabilizing bids do not exceed a
We may also offer the securities specified maximum. Short covering
through agents. Agents generally act transactions involve purchases of the
on a "best efforts" basis during their securities in the open market after
appointment, meaning they are not the distribution is completed to cover
obligated to purchase the securities. short positions. Penalty bids permit
the underwriters to reclaim a selling
Dealers and agents may be entitled concession from a dealer when the
to indemnification as underwriters by securities originally sold by the
us against certain liabilities under dealer are purchased in a covering
the Federal securities laws and other transaction to cover short positions.
laws. Those activities may cause the price
of the securities to be higher than it
We or the underwriters or agents would otherwise be. If commenced, the
may solicit offers by institutions underwriters may discontinue those
approved by us to purchase securities activities at any time.
under contracts providing for payment
in the future. Permitted institutions The Supplement will set forth the
include commercial and savings banks, anticipated delivery date of the
insurance companies, pension funds, securities being sold at that time.
investment companies, educational and
charitable institutions and others.
Certain conditions apply to those
purchases.
LEGAL MATTERS
Unless otherwise noted in a securities offered through this
Supplement, William J. Hallinan, Esq., Prospectus and any Supplement and
Senior Vice President-General Counsel Brown & Wood LLP will act as counsel
to FINOVA, will pass on the legality for any underwriters or agents.
of the
EXPERTS
Deloitte & Touche LLP, independent ended December 31, 1996. The financial
auditors, have audited the financial statements are incorporated into this
statements for FINOVA incorporated in Prospectus by reference in reliance
this Prospectus by reference from our upon their report given upon their
Annual Report on Form 10-K for the authority as experts in accounting and
year auditing.
10
<PAGE>
You should rely only on the --------------------------------------
information contained in or
incorporated by reference in this
Prospectus or in the Supplement. We
have authorized no one to provide you
with different information.
FINOVA(R)
We are not making an offer of these
securities in any location where the
offer is not permitted.
You should not assume that the FINOVA
information in this Prospectus or in Capital
the Supplement, including information Corporation
incorporated by reference, is accurate
as of any date other than the date on
the front of the Prospectus or
Supplement, as applicable.
---------------- 6.25% Notes
Due August 15, 2000
TABLE OF CONTENTS
Page
----
PROSPECTUS SUPPLEMENT
FINOVA Capital Corporation ...... S-2
Note Terms ...................... S-3 PROSPECTUS SUPPLEMENT
Underwriting .................... S-3
PROSPECTUS
Where You Can Find More
Information .................. 2
FINOVA Capital Corporation ...... 2
Ratio of Income to Fixed Charges 4
Special Note Regarding Deutsche Morgan Grenfell
Forward-Looking Statements ... 4
Use of Proceeds ................. 4 BancAmerica Securities, Inc.
Description of the Securities ... 5
Plan of Distribution ............ 9
Legal Matters ................... 10
Experts ......................... 10
