Prospectus Supplement FINOVA
- ---------------------
(To Prospectus dated May 28, 1997)
$100,000,000 FINOVA Capital Corporation
7.40% Notes Due 1850 N. Central Avenue
June 1, 2007 P.O. Box 2209
Phoenix, Arizona 85002-2209
- --------------------------------------------------------------------------------
TERMS OF NOTES
o Interest paid on June 1 and o Global security held by The
December 1, accruing from the date Depository Trust Company,
we issue the Notes. generally.
o First interest payment date on o No redemption before maturity. No
December 1, 1997. 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 .............. 99.735 0.625 99.11%
Total ................. $99,735,000 $625,000 $99,110,000
- ------------------
(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 June 2, 1997, subject to
conditions.
CITICORP SECURITIES, INC.
May 28, 1997
<PAGE>
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, FINOVA's principal lines of
formerly known as Greyhound Financial business are detailed more fully in
Corporation ("FINOVA" or "us"), is a the Prospectus. Those lines include:
financial services company that
provides collateralized financing and o Commercial Equipment Finance
leasing products to commercial
enterprises in focused market niches, o Commercial Finance
principally in the U.S. We
concentrate on lending to midsize o Commercial Real Estate Finance
businesses and have been in operation
for over 42 years. o Communications Finance
FINOVA extends revolving credit o Corporate Finance
facilities, term loans, and equipment
and real estate financing to o Factoring Services
"middle-market" businesses with
financing needs falling generally o Franchise Finance
between $500,000 and $35 million. We
also offer sales financing programs o Healthcare Finance
to manufacturers, distributors,
vendors and franchisors to help o Inventory Finance
facilitate sales of their products to
customers. o Portfolio Services
We operate in 15 specific industry o Public Finance
or market niches in which our
expertise in evaluating the o Rediscount Finance
creditworthiness of prospective
customers and our ability to provide o Resort Finance
value-added services enable us to
differentiate ourselves from our o Transportation Finance/Capital
competitors. That expertise and Services
ability also enable us to command
product pricing that provides a o FINOVA Investment Alliance
satisfactory spread over our
borrowing costs.
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 First Interstate Bank of Arizona,
Prospectus. The Notes are to be N.A.), as Trustee.
issued as a separate series of
securities under the Indenture dated
as of
Maximum Amount: $100,000,000 principal amount
Maturity: June 1, 2007
Interest Rate: 7.40% per year
Interest Payment Dates: June 1 and December 1, accruing from the date we
issue the Notes. First interest payment date is
December 1, 1997.
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
S-2
<PAGE>
UNDERWRITING
We have entered into an Notes to certain dealers at that
Underwriting Agreement dated May 28, price less a concession of 0.40%. The
1997 with Citicorp Securities, Inc., Underwriter or those dealers may
as Underwriter. The agreement allow a discount of 0.25% on sales to
provides that the Underwriter will certain other dealers. After the
purchase from us all of the Notes if initial public offering of the Notes,
any of the Notes are purchased. It the Underwriter may change the public
need not purchase any Notes unless offering price, concession to dealers
certain conditions are satisfied. We and discount.
have agreed to indemnify the
Underwriter against certain
liabilities, including civil The Notes are a new issue of
liabilities under the Securities Act securities with no established
of 1933, or to contribute to payments trading market. The Underwriter has
which the Underwriter may be required advised us that it intends to act as
to make for those liabilities. a market maker for the Notes. It is
not obligated to do so, however, and
The Underwriter advises us that it it may discontinue any market making
proposes to offer the Notes to the at any time without notice. Neither
public initially at the offering we nor the Underwriter can assure the
price set forth on the cover page of liquidity of any trading market for
this Supplement. It may offer the the Notes.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
result, you would have to rely on
The Notes will not be qualified other available remedies, including
for distribution under the Canadian common law or U.S. law rights of
securities laws, including the action for damages or rescission.
qualification requirements of each
province where sales of Notes are All of our directors and officers,
made. Any resales of Notes in Canada and the experts named in the
must comply with those laws, or an Prospectus, as well as our or their
exemption from those laws, which will assets, may be located outside of
vary depending on the relevant Canada. As a result, you may not be
jurisdiction. You are advised to seek able to effect service of process
legal advice prior to any purchase or within Canada on us or them. It may
resale of the Notes. not be possible to satisfy a judgment
against us or them in Canada or to
REPRESENTATIONS OF PURCHASERS enforce a judgment obtained in
Canadian courts outside of Canada.
If you are a purchaser of Notes in
Canada and you receive a purchase NOTICE TO BRITISH COLUMBIA RESIDENTS
confirmation, you will be deemed to
represent to us, the Underwriter and If you are a purchaser of Notes
your dealer that you are entitled and if the Securities Act (British
under provincial securities laws to Columbia) applies, we advise you that
purchase the Notes without the you are required to file a report
benefit of a prospectus qualified with the British Columbia Securities
under the securities laws of Canada. Commission within 10 days of the sale
If required by law, you will also of any Notes acquired by you under
represent that you are purchasing the this offering. The report must be in
Notes as a principal and not as an the form attached to that
agent. You will also represent that commission's Blanket Order #95/17, a
you have reviewed the text above copy of which may be obtained from us
under "Resale Restrictions." If you or the Underwriter. You need only
are purchasing the Notes in British file one report for Notes acquired on
Columbia, you will also represent the same day under the same
that you are not purchasing them as prospectus exemption.
an individual.
TAXATION AND ELIGIBILITY FOR
RIGHTS OF ACTION (ONTARIO PURCHASERS) INVESTMENT
The Notes are offered by a foreign You should consult your own legal
issuer, so the contractual rights of and tax advisors about the
action prescribed by section 32 of consequences of investing in the
the Regulation under Securities Act Notes in your circumstances and
(Ontario) will not apply to you if whether you are eligible to buy them
you are an Ontario purchaser. As a under Canadian law.
S-3
<PAGE>
Prospectus
- ---------- FINOVA
FINOVA CAPITAL CORPORATION
SENIOR DEBT SECURITIES
We may offer from time to time securities in one or more series,
under this Prospectus up to $1.5 with the same or various maturities,
billion principal amount of our at or above par or with original
senior debt securities ("securities") issue discount, and in fully
on terms to be determined at the time registered form or the form of one or
of sale. We may issue the more global securities.
PROSPECTUS SUPPLEMENT
The Supplement to the Prospectus also add, update or change
for each offering of securities will information contained in this
contain the specific information and Prospectus. It is important that you
terms for that offering. The read both this Prospectus and the
Supplement may Supplement before you invest.
---------------
The securities have not been approved
or disapproved by the SEC or any
state securities commission.
We may offer the securities directly
None of those authorities has or through underwriters, agents or
determined that this Prospectus is dealers. The Supplement will describe
accurate or complete. the terms of that plan of
distribution. "Plan of Distribution"
Any representation to the contrary is below also provides more information
a criminal offense. on this topic. May 28, 1997
May 28, 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 curities 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 o Annual Report of Form 10-K for
file at the SEC's public reference the year ended December 31,
rooms in Washington, D.C., New York, 1996.
New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 o Portions of our Proxy Statement
for more information on the public on Schedule 14A for the Annual
reference rooms and their copy Meeting of Shareholders held on
charges. Our SEC filings are also May 8, 1997 that have been
available to the public from the incorporated by reference into
SEC's web site at http://www.sec.gov. our 10-K.
You may also inspect our SEC reports
and other information at the New York o Quarterly Report on Form 10-Q
Stock Exchange, 20 Broad Street, New for the quarter ended March 31,
York, New York 10005. 1997.
The SEC allows us to "incorporate o Current Report on Form 8-K dated
by reference" the information we file April 18, 1997.
with them, which means we can
disclose information to you by You may request a copy of those
referring you to those documents. filings, other than exhibits, at no
Information incorporated by reference cost, by contacting us at:
is part of this Prospectus. Later
information filed with the SEC Treasurer
updates and supersedes this FINOVA Capital Corporation
Prospectus. 1850 N. Central Avenue
P.O. Box 2209
We incorporate by reference the Phoenix, Arizona 85002-2209
documents listed below and any future (602) 207-6900
filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of
the Se-
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, worthiness of prospective customers
formerly known as Greyhound Financial and our ability to provide
Corporation ("FINOVA" or "us"), is a value-added services enable us to
financial services company that differentiate ourselves from our
provides collateralized financing and competitors. That expertise and
leasing products to commercial ability also enable us to command
enterprises in focused market niches, product pricing that provides a
principally in the U.S. We satisfactory spread over our
concentrate on lending to midsize borrowing costs.
businesses and have been in operation
for over 42 years. We seek to maintain a high quality
portfolio and to minimize non-earning
FINOVA extends revolving credit assets and write-offs. We use clearly
facilities, term loans, and equipment defined underwriting criteria and
and real estate financing to stringent portfolio management
"middle-market" businesses with techniques. We diversify our lending
financing needs falling generally activities geographically and among a
between $500,000 and $35 million. We range of industries, customers and
also offer sales financing programs loan products.
to manufacturers, distributors,
vendors and franchisors to help Due to the diversity of our
facilitate sales of their products to portfolio, we believe we are better
customers. able to manage competitive changes in
our markets and to withstand the
We operate in 15 specific industry impact of deteriorating economic
or market niches in which our conditions on a regional or national
expertise in evaluating the credit- basis. There can be no assurance,
however, that com
2
<PAGE>
petitive changes, borrowers' and service providers. The group
performance, economic conditions or extends revolving credit
other factors will not result in an facilities and term loans
adverse impact on our results of secured by the assets of the
operations or financial condition. borrower, with significant
emphasis on the borrower's cash
FINOVA generates interest and flow as the source of repayment
other income through charges assessed of the secured loan.
on outstanding loans, loan servicing,
leasing and other fees. Our primary o FACTORING SERVICES provides full
expenses are the costs of funding our service factoring and accounts
loan and lease business, including receivable management services
interest paid on debt, provisions for for entrepreneurial and larger
possible credit losses, marketing firms, operating primarily in
expenses, salaries and employee the textile and apparel
benefits, servicing and other industries. The annual factored
operating expenses and income taxes. volume of these companies is
generally between $5 million and
LINES OF BUSINESS $25 million.
We operate the following principal o FRANCHISE FINANCE offers
lines of business: equipment, real estate and
acquisition financing programs
o COMMERCIAL EQUIPMENT FINANCE for operators of established
offers equipment leases, loans franchise concepts. We typically
and "turnkey" financing to the purchase the equipment leased to
supermarket, manufacturing, the ultimate end-user from the
packaging and general aviation manufacturer, vendor or dealer
industries. Typical transaction selected by the end-user.
sizes are $500,000 to $15 Transaction sizes generally
million. range from $500,000 to $15
million.
o COMMERCIAL FINANCE offers
collateral- oriented revolving o HEALTHCARE FINANCE offers a full
credit facilities and term loans range of equipment and real
for manufacturers, distributors, estate financing and asset
wholesalers and service management services for the
companies. Typical transaction health care industry, targeting
sizes range from $500,000 to $3 middle market health care
million. providers in the U.S.
Transaction sizes typically
o COMMERCIAL REAL ESTATE FINANCE range from $500,000 to $25
provides cash-flow-based million.
financing primarily for
acquisitions and refinancings to o INVENTORY FINANCE provides
experienced real estate inventory financing, combined
developers and owner/occupants inventory/accounts receivable
of income-producing properties lines of credit and purchase
in the U.S. We concentrate on order financing for equipment
secured financing opportunities, distributors, value-added
generally between $5 million and resellers and dealers.
$25 million, involving senior Transaction sizes generally
mortgage term loans on range from $500,000 to $30
owner-occupied commercial real million.
estate. We also manage our
portfolio of real estate o PORTFOLIO SERVICES provides
leveraged leases in this line of customized receivable servicing
business. and collections for timeshare
developers and other generators
o COMMUNICATIONS FINANCE of consumer receivables, which
specializes in radio and can simplify their loan
television financing. Other administration and cash
markets include cable management functions.
television, print and outdoor
media services in the U.S. We o PUBLIC FINANCE provides
extend secured loans to primarily tax-exempt financing
communications businesses to state and local governments
requiring funds for and non-profit corporations.
recapitalizations, refinancings Typical transaction sizes range
or acquisitions. Loan sizes from $100,000 to $5 million.
generally range from $1 million
to $40 million. o REDISCOUNT FINANCE offers $1
million to $35 million revolving
o CORPORATE FINANCE provides credit lines to regional
financing, generally in the consumer finance companies,
range of $2 million to $40 which in turn extend credit to
million, focusing on middle consumers. Our customers provide
market businesses nationally. credit to consumers to finance
Typical industries served home improvements, automobile
include distribution, wholesale, purchases, insurance premiums
specialty retail, manufacturing and a variety of other financial
needs.
o RESORT FINANCE focuses on
successful, experienced resort
developers, primarily of
timeshare resorts, second home
communities, golf
3
<PAGE>
resorts and resort hotels. through our London, England
Extending funds through a office. Our Capital Services
variety of lending options, we activities also provide
provide loans and lines of leveraged lease financing on
credit ranging from $5 million transportation equipment.
to $30 million for construction,
acquisitions, receivables o FINOVA INVESTMENT ALLIANCE
financing and purchases and provides or intends to provide
other uses. Through our equity and mezzanine debt
Portfolio Services Operations, financing for midsize businesses
we offer expanded convenience in partnership with
and service to our customers. institutional investors and
selected fund sponsors. Typical
o TRANSPORTATION FINANCE/CAPITAL transaction sizes range from $2
SERVICES structures secured million to $15 million.
financings for specialized areas
of the transportation industry, FINOVA Capital Corporation, a
principally involving domestic Delaware corporation, was
and foreign used aircraft, some incorporated in 1965 and is the
new aircraft, domestic successor to a California corporation
short-line railroads and new and that was formed in 1954. Our
used rail equipment. Typical principal executive offices are
transactions range from $5 located at 1850 N. Central Avenue,
million to $30 million and P.O. Box 2209, Phoenix, Arizona
involve financing up to 80% of 85002-2209. Our telephone number is
the fair market value of used (602) 207-6900. All of our capital
equipment. We also serve as stock is owned by The FINOVA Group
equity participants in leveraged Inc. whose stock is traded on the New
lease transactions. We have been York Stock Exchange.
active in international aircraft
lending and leasing since 1992
RATIO OF INCOME TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
- --------- --------------------------------
1997 1996 1995 1994 1993 1992
- ---- ---- ---- ---- ---- ----
<C> <C> <C> <C> <C> <C>
1.54 1.50 1.44 1.58 1.50 1.37
</TABLE>
Variations in interest rates Income available for fixed charges,
generally do not have a substantial for purposes of computing the above
impact on the ratio because ratios, consists of income from
fixed-rate and floating-rate assets continuing operations before income
are generally matched with taxes plus fixed charges. Fixed
liabilities of similar rate and term. charges consist of interest and
related debt expense, and a portion
of rental expense determined to be
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 strategy, 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 actions, the cost of our capital,
or financial condition or state other which may depend in part on our
forward-looking information. Known portfolio quality, ratings, prospects
and unknown risks, uncertainties and and outlook, changes in governmental
other factors could cause the actual regulation, tax rates and similar
results to differ materially from matters, the results of litigation,
those contemplated by those the ability to attract and retain
statements. The forward-looking quality employees and other risks
information is based on various detailed in our other filings with
factors and was derived using the SEC. We do not promise to update
numerous assumptions. forward- looking information to
reflect actual results or changes in
Important factors that may cause assumptions or other factors that
the actual results to differ include, could affect those statements.
without limitation, the results of
4
<PAGE>
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.
DESCRIPTION OF THE SECURITIES
We will issue the securities under o The amount or percentage payable
an Indenture dated as of October 1, if we accelerate their maturity,
1995, as supplemented and amended if other than the principal
from time to time, between us and The amount.
Bank of New York (formerly First
Interstate Bank, N.A.), as Trustee.
The Indenture is filed as an exhibit o Any changes to the events of
to the registration statement of default or covenants set forth
which this Prospectus is a part. To in the Indenture.
obtain a copy of the Indenture, see
"Where You Can Find More o Any other terms consistent with
Information." The following the Indenture.
description is a brief summary of and
is subject to all the terms of the We may authorize and determine the
Indenture. terms of a series of securities by
resolution of our board of directors
GENERAL or one of its committees or through a
supplemental indenture.
The securities offered by this
Prospectus will be limited to $1.5 FORM OF SECURITIES
billion principal amount. The
Indenture does not limit the amount The securities will be issued in
of securities we could offer under registered form. Unless the
it. We can issue securities in one or Supplement otherwise provides,
more series, in each case as securities will be issued as one or
authorized by us from time to time. more global securities. This means
Each series may differ as to their that we will not issue certificates
terms. The securities will be our to each holder. We will generally
unsecured general obligations and issue global securities in the total
will not be subordinated to our other principal amount of the securities
general indebtedness. distributed in that series. We will
issue securities only in
The Supplement will address the denominations of $1,000 or integral
following terms of the securities: multiples of that amount, unless the
Supplement states otherwise.
o Their title.
GLOBAL SECURITIES
o Any limits on the principal
amounts to be issued. IN GENERAL. Securities in global
form will be deposited with or on
o The dates on which the principal behalf of a depositary. Global
is payable. securities are represented by one or
more global certificates for the
o The rates (which may be fixed or series registered in the name of the
variable) at which they shall depositary or its nominee. Securities
bear interest, or the method for in global form may not be transferred
determining rates. except as a whole among the
depositary, a nominee of or a
o The dates from which the successor to the depositary and any
interest will accrue and will be nominee of that successor. Unless
payable, or the method of otherwise identified in the
determining those dates, and any Supplement, the depositary will be
record dates for the payments The Depositary Trust Company.
due.
o Any provisions for redemption at
our option or otherwise,
including the periods, prices
and terms of redemption.
o Any sinking fund or similar
provisions, whether mandatory or
at the holder's option, along
with the periods, prices and
terms of redemption, purchase or
repayment.
5
<PAGE>
NO DEPOSITARY OR GLOBAL DTC ORGANIZATION. The Depository
SECURITIES. If a depositary for a Trust Company is a limited-purpose
series is unwilling or unable to trust company organized under the New
continue as depositary, and a York Banking Law, a "banking
successor is not appointed by us organization" within the meaning of
within 90 days, we will issue that law, a member of the Federal
securities of that series in Reserve System, a "clearing
definitive form in exchange for the corporation" within the meaning of
global security or securities of that the New York Uniform Commercial Code,
series. We may also determine at any and a "clearing agency" registered
time in our discretion not to use under the provisions of Section 17A
global securities for any series. In of the Securities Exchange Act of
that event, we will issue securities 1934, as amended.
in definitive form.
DTC is owned by a number of its
OWNERSHIP OF THE GLOBAL direct participants and by the New
SECURITIES/ BENEFICIAL OWNERSHIP. So York Stock Exchange, Inc., the
long as the depositary or its nominee American Stock Exchange, Inc. and the
is the registered owner of a global National Association of Securities
security, that entity will be the Dealers, Inc. Direct participants
sole holder of the securities include securities brokers and
represented by that instrument. dealers, banks, trust companies,
FINOVA and the Trustee are only clearing corporations and certain
required to treat the depositary or other organizations who directly
its nominee as the legal owner of participate in DTC (each a "direct
those securities for all purposes participant"). Other entities
under the Indenture. ("indirect participants") may access
DTC's system by clearing transactions
Each actual purchaser of through or maintaining a custodial
securities represented by a global relationship with direct
security (a "beneficial owner") will participants, either directly or
not be entitled to receive physical indirectly. The rules applicable to
delivery of certificated securities, DTC and its participants are on file
will not be considered the holders of with the SEC.
those securities for any purpose
under the Indenture, and will not be DTC ACTIVITIES. DTC holds
able to transfer or exchange the securities that its participants
global securities, unless this deposit with it. DTC also facilitates
Prospectus or the Supplement provide the settlement among participants of
to the contrary. As a result, each securities transactions, such as
beneficial owner must rely on the transfers and pledges, in deposited
procedures of the depositary to securities through electronic
exercise any rights of a holder under computerized book-entry changes in
the Indenture. In addition, if the participant's accounts. Doing so
beneficial owner is not a direct or eliminates the need for physical
indirect participant in the movement of securities certificates.
depositary (each a "participant"),
the beneficial owner must rely on the PARTICIPANT'S RECORDS. Except as
procedures of the participant through otherwise provided in this Prospectus
which it owns its beneficial interest or a Supplement, purchases of the
in the global security. securities must be made by or through
direct participants, which will
The laws of some jurisdictions receive a credit for the securities
require that certain purchasers of on the depositary's records. The
securities take physical delivery of beneficial owner's ownership interest
the securities in certificated form. is in turn to be recorded on the
Those laws and the above conditions direct and indirect participant's
may impair the ability to transfer records. Beneficial owners will not
beneficial interests in the global receive written confirmations from
securities. the depositary of their purchase, but
they are expected to receive them,
THE DEPOSITORY TRUST COMPANY along with periodic statements of
their holdings, from the direct or
The following is based on indirect participants through whom
information furnished by The they entered into the transaction.
Depository Trust Company ("DTC") and
applies to the extent it is the Transfers of interests in the
depositary, unless otherwise stated global securities will be made on the
in a Supplement: books of the participants on behalf
of the beneficial owners.
REGISTERED OWNER. The securities Certificates representing the
will be issued as fully registered interest of the beneficial owners in
securities in the name of Cede & Co. the securities will not be issued
(DTC's partnership nominee). One unless the use of global securities
fully registered global security is suspended as provided above.
generally will be issued for each
$200 million principal amount of The depositary has no knowledge of
securities. The Trustee will deposit the actual beneficial owners of the
the global securities with the global securities. Its records
depositary. The deposit of the global
securities with DTC and its
registration in the name of Cede &
Co. will not change the beneficial
ownership of the securities.
6
<PAGE>
only reflect the identity of the require payment to cover taxes and
direct participants as owners of the other governmental charges. The
securities. Those participants may or Trustee will initially act as
may not be the beneficial owners. authenticating agent under the
Participants are responsible for Indenture.
keeping account of their holdings on
behalf of their customers. SAME-DAY SETTLEMENT AND PAYMENT
NOTICES AMONG THE DEPOSITARY, Unless the Supplement otherwise
PARTICIPANTS AND BENEFICIAL OWNERS. provides, the securities will be
Notices and other communications by settled in immediately available
the depositary, its participants and funds. We will make payments of
the beneficial owners will be principal and interest in immediately
governed by arrangements among them, available funds.
subject to any legal requirements in
effect. PAYMENT AND PAYING AGENT
VOTING PROCEDURES. Neither DTC nor If the securities are not held in
Cede & Co. will consent or vote with global form, we will make payment of
respect to the global securities. The principal and premium, if any,
depositary generally mails an omnibus against surrender of the securities
proxy to us just after the applicable at the principal office of the
record date. That proxy assigns Cede Trustee in New York, New York. We
& Co.'s consenting or voting rights will pay any installment of interest
to the direct participants to whose on securities to the record holder on
accounts the securities are credited the record date for that interest. We
at that time. can make those payments through the
Trustee, as noted above, by check
PAYMENTS. Principal and interest mailed by first class mail to the
payments made by us will be delivered registered holders at their
to the depositary. DTC's practice is registered address or by wire
to credit direct participants' transfer to an eligible account of
accounts on the applicable payment the 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
practices, as is the case with to be repaid to us. The beneficial
securities held for customers in owners of those interests will
bearer form or registered in "street thereafter look only to us for
name." Those payments will be the payment for those amounts.
responsibility of that participant,
not the depositary, the Trustee or CERTAIN INDENTURE PROVISIONS
us, subject to any legal requirements
in effect at that time. CERTAIN DEFINITIONS. The following
is a summary of certain terms defined
We are responsible for payment of in the Indenture. Those terms shall
principal, interest and premium, if be determined in accordance with
any, to the Trustee, who is generally accepted accounting
responsible to pay it to the principles, unless otherwise
depositary. The depositary is indicated.
responsible for disbursing those
payments to direct participants. The "Consolidated Net Tangible Assets"
participants are responsible for means the total of all assets
disbursing payments to the beneficial reflected on the most recent
owners. quarterly or annual consolidated
balance sheet of us and our
TRANSFER OR EXCHANGE OF SECURITIES consolidated Subsidiaries, at their
net book values (after deducting
You may transfer or exchange the related depreciation, depletion,
securities (other than a global amortization and all other valuation
security) without service charge at reserves), less the aggregate of our
our office designated for that current liabilities and those of our
purpose or at the office of any consolidated Subsidiaries reflected
transfer agent or security registrar on that balance sheet. We exclude
identified under the Indenture. You from assets goodwill, unamortized
must execute a proper form of debt discount and all other like
transfer and pay any taxes and other intangible assets. For purposes of
governmental charges resulting from this definition, "current
that action. You may transfer or liabilities" include all indebtedness
exchange the securities other than a for money borrowed, incurred, issued,
global security initially at our assumed or guaranteed by us and our
offices at 1850 N. Central Avenue, consolidated Subsidiaries, and other
P.O. Box 2209, Phoenix, Arizona payables and accruals, in each case
85002-2209 or at our office or agency payable on demand or due within one
established for that purpose in New year of the date of determination,
York, New York. but shall exclude any portion of
long-term debt maturing within one
Securities in the several year of that date of determination,
denominations will be interchangeable all as reflected on the consolidated
without service charge, but we may balance sheet of us and our
consolidated Subsidiaries.
7
<PAGE>
"Lien" means any lien, charge, reserves, so long as foreclosure
claim, security interest, pledge, or similar proceedings are not
hypothecation, right of another under commenced.
any conditional sale or other title
retention agreement or any other o Judgment Liens that have not
encumbrance affecting title to remained undischarged or
property. Lien includes any lease unstayed for more than 6 months.
under a sale and leaseback
arrangement. o Incidental or undetermined
construction, mechanics or
"Subsidiary" means any corporation similar Liens arising in the
a majority of the Voting Stock of ordinary course of business
which is owned, directly or relating to obligations not
indirectly, by us or by one or more overdue or which are being
Subsidiaries or by us and one or more contested by us or a Restricted
Subsidiaries. Subsidiary in good faith and
deposits for release of such
Liens.
"Restricted Subsidiary" is any
Subsidiary a majority of the Voting o Zoning restrictions, licenses,
Stock of which is owned, directly, by easements and similar
us or by one or more Restricted encumbrances or defects if
Subsidiaries or by us and one or more immaterial.
Restricted Subsidiaries and which is
designated as such by resolution of o Other Liens immaterial in the
our Board of Directors. aggregate incidental to our or
the Restricted Subsidiary's
business or property, other than
"Unrestricted Subsidiary" means for indebtedness.
any Subsidiary other than a
Restricted Subsidiary. o Banker's liens and set off
rights in the ordinary course of
"Voting Stock" means stock of any business.
class or classes (however designated)
having ordinary voting power for the o Leasehold or purchase rights,
election of a majority of the members exercisable for fair
of the board of directors (or any consideration, arising in the
governing body) of that corporation, ordinary course of business.
other than stock having that power
only by reason of the happening of a o Liens on property or securities
contingency. existing when an entity becomes
a Restricted Subsidiary or
LIMITATION ON LIENS. The Indenture merges with us or a Restricted
provides that FINOVA and its Subsidiary, provided it is not
Restricted Subsidiaries will not incurred in anticipation of
create, assume, incur or allow to be those events.
created, assumed or incurred or to
exist any Lien on any of our or their o Liens on property or securities
properties unless we secure the existing at the time of
securities equally and ratably with acquisition.
any other obligation so secured. The
Indenture contains the following o Liens in a total amount less
exceptions to that prohibition: than $25 million, excluding
Liens covered by the exceptions
o Leases of property in the noted above.
ordinary course of business or
if the property is not needed in o Liens securing indebtedness of
the operation of our business. us or a Restricted Subsidiary
provided those and similar Liens
o Purchase money security on indebtedness do not exceed
interests that are non-recourse 10% of Consolidated Net Tangible
to us or our Restricted Assets, excluding certain
Subsidiaries except to the preexisting indebtedness and
extent of the property so those Liens permitted above.
acquired or any proceeds from
that property, or both. MERGER, CONSOLIDATION AND SALE OF
ASSETS. We can not merge with or
o Governmental deposits or into, consolidate with, sell or lease
security as a condition to the all or substantially all of our
transaction of business or the assets to, or purchase all or
exercise of a privilege, or to substantially all the assets of
maintain self- insurance, or to another corporation unless we will be
participate in any fund in the surviving corporation or the
connection with worker's successor is incorporated in the U.S.
compensation, unemployment and assumes all of our obligations
insurance, pensions, social under the securities and the
security, or for appeal bonds. Indenture, provided that immediately
after that transaction, no default
o Liens for taxes or assessments will exist. A purchase by a
not yet due or which are payable Subsidiary of all or substantially
without a penalty or are being all the assets of another corporation
contested in good faith and with will not be a purchase of those
adequate
8
<PAGE>
assets by us. If, however, any of the If an event of default occurs and
transactions noted in this paragraph continues, the Trustee or the holders
occurs and results in a Lien on any of at least 25% of the series may
of our properties (except as declare those securities due and
permitted above), we must payable. We are required to certify
simultaneously secure the securities to the Trustee annually as to our
equally and ratably with the debt compliance with the Indenture.
secured by that Lien.
Holders of a majority of a series
MODIFICATION OF THE INDENTURE. may control certain actions of the
FINOVA and the Trustee may amend the Trustee and may waive past defaults
Indenture without consent of the for that series. Except as provided
holders of securities to do certain in the Indenture, the Trustee will
things, such as establishing the form not be under any obligation to
and terms of any series of exercise any of the rights or powers
securities. We must obtain consent of vested in it by the Indenture at the
holders of at least two-thirds of the request, order or direction of any
outstanding securities affected by a holder unless one or more of them
change to amend the terms of the shall have offered reasonable
Indenture or any supplemental indemnity to the Trustee.
indenture or the rights of the
holders of those securities. If an event of default occurs and
is continuing, the Trustee may
Unanimous consent is required for reimburse itself for its reasonable
changes to extend the fixed maturity compensation and expenses incurred
of any securities, reduce the out of any sums held or received by
principal, redemption premium or rate it before making any payments to the
of interest, extend the time of holders of the securities of the
payment of interest, change the form defaulted series.
of currency or to limit the right to
sue for payment on or after maturity The right of any holders of
of the securities. Unanimous consent securities of a series to commence an
is also required to reduce the level action for any remedy is subject to
of consents needed to approve any certain conditions, including the
such change. The Trustee must consent requirement that the holders of at
to changes modifying its rights, least 25% of that series request that
duties or immunities. the Trustee take such action, and
offer reasonable indemnity to the
DEFAULTS. Events of default under Trustee against its liabilities
the Indenture for any series are: incurred in doing so.
o Failure for 30 days to pay DEFEASANCE
interest on any securities of
that series. We may defease the securities of a
series, meaning we would satisfy our
o Failure to pay principal (other duties under that series before
than sinking fund redemptions) maturity. We may do so by depositing
or premium, if any, on with the Trustee, in trust for the
securities of that series. benefit of the holders, either enough
funds to pay, or direct U.S.
o Failure for 30 days to pay any government obligations that, together
sinking fund installment on that with the income on those obligations
series. (without considering any
reinvestment), will be sufficient to
o Violation of a covenant under pay, the obligation of that series,
the Indenture pertaining to that including principal, premium, if any,
series that persists for at and interest. Certain other
least 90 days after we are conditions must be met before we may
notified by the Trustee or the do so. We must deliver an opinion of
holders of 25% of the series. counsel that the holders of that
series will have no Federal income
o Default in other instruments or tax consequences as a result of that
under any other series of deposit.
securities resulting in
acceleration of indebtedness CONCERNING THE TRUSTEE
over $15 million, unless that
default is rescinded or The Trustee is one of the banks in
discharged within 10 days after one of our credit agreements and from
written notice by the Trustee or time to time may perform other
the holders of 10% of that banking, trust or related services on
series. behalf of FINOVA or our customers.
o Bankruptcy, insolvency or
similar event.
o Any other event of default with
respect to the securities of
that series.
9
<PAGE>
PLAN OF DISTRIBUTION
We may offer the securities Dealers and agents may be entitled
directly or through underwriters, to indemnification as underwriters by
dealers or agents. The Supplement us against certain liabilities under
will identify those underwriters, the Federal securities laws and other
dealers or agents and will describe laws.
that plan of distribution. Firms not
so named will have no direct or We or the underwriters or agents
indirect participation in any may solicit offers by institutions
underwriting of those securities, approved by us to purchase securities
although a firm may participate in under contracts providing for payment
the distribution of securities under in the future. Permitted institutions
circumstances entitling it to a include commercial and savings banks,
dealer's allowance or agent's insurance companies, pension funds,
commission. investment companies, educational and
charitable institutions and others.
We anticipate that any Certain conditions apply to those
underwriting agreement will entitle purchases.
the underwriters to indemnity against
certain civil liabilities under the Any underwriter may engage in
Federal securities laws and other over-allotment, stabilizing
laws, provide that their obligations transactions, short covering
to purchase the securities will be transactions and penalty bids in
subject to certain conditions, and accordance with Regulation M under
generally require them to purchase the Securities Exchange Act of 1934.
all of the securities if any are Over- allotment involves sales in
purchased. excess of the offering size, which
creates a short position. Stabilizing
Unless otherwise noted in the transactions permit bids to purchase
Supplement, the securities will be the underlying security so long as
offered by the underwriters, if any, the stabilizing bids do not exceed a
when, as and if issued by us, specified maximum. Short covering
delivered to and accepted by the transactions involve purchases of the
underwriters and subject to their securities in the open market after
right to reject orders in whole or in the distribution is completed to
part. cover short positions. Penalty bids
permit the underwriters to reclaim a
We may sell securities to dealers, selling concession from a dealer when
as principals. Those dealers may then the securities originally sold by the
resell the securities to the public dealer are purchased in a covering
at varying prices set by those transaction to cover short positions.
dealers from time to time. Those activities may cause the price
of the securities to be higher than
We may also offer the securities it would otherwise be. If commenced,
through agents. Agents generally act the underwriters may discontinue
on a "best efforts" basis during those activities at any time.
their appointment, meaning they are
not obligated to purchase the The Supplement will set forth the
securities. anticipated delivery date of the
securities being sold at that time.
LEGAL MATTERS
Unless otherwise noted in a securities offered through this
Supplement, William J. Hallinan, Prospectus and any Supplement and
Esq., Senior Vice President-General Brown & Wood LLP will act as counsel
Counsel to FINOVA, will pass on the for any underwriters or agents.
legality of the
EXPERTS
Deloitte & Touche LLP, independent 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
year ended and auditing.
10
<PAGE>
===================================== =====================================
YOU SHOULD RELY ONLY ON THE
INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS
PROSPECTUS OR IN THE SUPPLEMENT. WE FINOVA
HAVE AUTHORIZED NO ONE TO PROVIDE YOU
WITH DIFFERENT INFORMATION.
WE ARE NOT MAKING AN OFFER OF THESE
SECURITIES IN ANY LOCATION WHERE THE
OFFER IS NOT PERMITTED.
FINOVA
YOU SHOULD NOT ASSUME THAT THE CAPITAL
INFORMATION IN THIS PROSPECTUS OR IN CORPORATION
THE SUPPLEMENT, INCLUDING INFORMATION
INCORPORATED BY REFERENCE, IS
ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THE
PROSPECTUS OR SUPPLEMENT, AS
APPLICABLE.
7.40% Notes
----------- Due June 1, 2007
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PROSPECTUS SUPPLEMENT
FINOVA Capital Corporation ................S-2
Note Terms ................................S-2 PROSPECTUS SUPPLEMENT
Underwriting ..............................S-3
Notice to Canadian Residents ..............S-3
PROSPECTUS
Where You Can Find More Information ......2
FINOVA Capital Corporation ................2
Ratio of Income to Fixed Charges ..........4 CITICORP SECURITIES, INC.
Special Note Regarding Forward-Looking
Statements ...............................4
Use of Proceeds ...........................5
Description of the Securities .............5
Plan of Distribution ......................10
Legal Matters .............................10
Experts ...................................10
</TABLE>
===================================== =====================================
