Prospectus Supplement FINOVA
(To Prospectus dated June 16, 1997)
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$100,000,000 FINOVA Capital Corporation
6.90% Notes Due 1850 N. Central Avenue
June 19, 2004 P.O. Box 2209
Phoenix, Arizona 85002-2209
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TERMS OF NOTES
o Interest paid on June 19 and o Global security held by The
December 19, accruing from the Depository Trust Company,
date we issue the Notes. generally.
o First interest payment date on o No redemption before maturity.
December 19, 1997. No 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)
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Per Note .......... 99.973% 0.600% 99.373%
Total ............. $ 99,973,000 $ 600,000 $ 99,373,000
(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 Book entry delivery of Notes expected
is a criminal offense. on June 19, 1997, subject to
conditions.
Deutsche Morgan Grenfell NationsBanc Capital Markets, Inc.
June 16, 1997
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FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, FINOVA's principal lines of business
formerly known as Greyhound are detailed more fully in the
Financial Corporation ("FINOVA" or Prospectus. Those lines include:
"us"), is a financial services
company that provides collateralized o Commercial Equipment Finance
financing and leasing products to
commercial enterprises in focused o Commercial Finance
market niches, principally in the
U.S. We concentrate on lending to o Commercial Real Estate Finance
midsize 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 o Factoring Services
to "middle-market" businesses with
financing needs falling generally o Franchise Finance
between $500,000 and $35 million.
o Healthcare Finance
We operate in 15 specific
industry or market niches in which o Inventory Finance
our expertise in evaluating the
creditworthiness of prospective o Portfolio Services
customers and our ability to provide
value-added services enable us to o Public Finance
differentiate ourselves from our
competitors. That expertise and o Rediscount Finance
ability also enable us to command
product pricing that provides a o Resort Finance
satisfactory spread over our
borrowing costs. o Transportation Finance
o FINOVA Investment Alliance
NOTE TERMS
The following description of October 1, 1995, between us and
supplements the "Description of the The Bank of New York (as successor
Securities" section in the to First Interstate Bank of Arizona,
Prospectus. The Notes are to be N.A.), as Trustee. Maximum Amount:
issued as a separate series of $100,000,000 principal amount
securities under the Indenture dated
as
Maturity: June 19, 2004
Interest Rate: 6.90% per year
Interest Payment Dates: June 19 and December 19, accruing from the date
we issue the Notes. First interest payment date
is December 19, 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
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UNDERWRITING
We have entered into an They may offer the Notes to certain
Underwriting Agreement dated June 16, dealers at that price less a
1997 with Deutsche Morgan Grenfell concession of 0.375%. The
Inc. and NationsBanc Capital Markets, Underwriters or those dealers may
Inc., as Underwriters. The agreement allow a discount of 0.200% on sales
provides that each Underwriter will to certain other dealers. After the
purchase from us $50 million initial public offering of the Notes,
principal amount of the Notes and the Underwriters may change the
will purchase all of those Notes if public offering price, concession to
any of the Notes are purchased. They dealers and discount.
need not purchase any Notes unless
certain conditions are satisfied. We The Notes are a new issue of
have agreed to indemnify the securities with no established
Underwriters against certain trading market. The Underwriters have
liabilities, including civil advised us that they intend to act as
liabilities under the Securities Act market makers for the Notes. They are
of 1933, or to contribute to payments not obligated to do so, however, and
which the Underwriters may be they may discontinue any market
required to make for those making at any time without notice.
liabilities. Neither we nor the Underwriters can
assure the liquidity of any trading
The Underwriters advise us that market for the Notes.
they propose to offer the Notes to
the public initially at the offering
price set forth on the cover page of
this Supplement.
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Prospectus FINOVA
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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.
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. June 16, 1997
June 16, 1997
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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 o Annual Report of Form 10-K for
file at the SEC's public reference the year ended December 31, 1996.
rooms in Washington, D.C., New York,
New York and Chicago, Illinois. o Portions of our Proxy Statement
Please call the SEC at 1-800-SEC-0330 on Schedule 14A for the Annual
for more information on the public Meeting of Shareholders held on
reference rooms and their copy May 8, 1997 that have been
charges. Our SEC filings are also incorporated by reference into
available to the public from the our 10-K.
SEC's web site at http://www.sec.gov.
You may also inspect our SEC reports o Quarterly Report on Form 10-Q for
and other information at the New York the quarter ended March 31, 1997.
Stock Exchange, 20 Broad Street, New
York, New York 10005. o Current Report on Form 8-K dated
April 18, 1997.
The SEC allows us to "incorporate
by reference" the information we file You may request a copy of those
with them, which means we can filings, other than exhibits, at no
disclose information to you by cost, by contacting us at:
referring you to those documents.
Information incorporated by reference Treasurer
is part of this Prospectus. Later FINOVA Capital Corporation
information filed with the SEC 1850 N. Central Avenue
updates and supersedes this P.O. Box 2209
Prospectus. Phoenix, Arizona 85002-2209
(602) 207-6900
We incorporate by reference the
documents listed below and any future
filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of
the
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, and ability also enable us to command
formerly known as Greyhound Financial product pricing that provides a
Corporation ("FINOVA" or "us"), is a satisfactory spread over our
financial services company that borrowing costs.
provides collateralized financing and
leasing products to commercial We seek to maintain a high quality
enterprises in focused market niches, portfolio and to minimize non-earning
principally in the U.S. We assets and write-offs. We use clearly
concentrate on lending to midsize defined underwriting criteria and
businesses and have been in operation stringent portfolio management
for over 42 years. techniques. We diversify our lending
activities geographically and among a
FINOVA extends revolving credit range of industries, customers and
facilities, term loans, and equipment loan products.
and real estate financing to
"middle-market" businesses with Due to the diversity of our
financing needs falling generally portfolio, we believe we are better
between $500,000 and $35 million. 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,
worthiness of prospective customers however, that competitive changes,
and our ability to provide borrowers' performance, economic
value-added services enable us to conditions or other factors will not
differentiate ourselves from our result in an adverse
competitors. That expertise
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impact on our results of operations The annual factored volume of
or financial condition. these companies is generally
between $5 million and $25
FINOVA generates interest and million. This line provides
other income through charges assessed accounts receivable and
on outstanding loans, loan servicing, inventory financing and loans
leasing and other fees. Our primary secured by equipment and real
expenses are the costs of funding our estate.
loan and lease business, including
interest paid on debt, provisions for o FRANCHISE FINANCE offers
possible credit losses, marketing equipment, real estate and
expenses, salaries and employee acquisition financing for
benefits, servicing and other operators of established
operating expenses and income taxes. franchise concepts. Transaction
sizes generally range from
$500,000 to $15 million.
LINES OF BUSINESS
o HEALTHCARE FINANCE offers a
We operate the following principal full range of working capital,
lines of business: equipment and real estate
financing products for the U.S.
o COMMERCIAL EQUIPMENT FINANCE health care industry.
offers equipment leases, loans Transaction sizes typically
and "turnkey" financing to a range from $500,000 to $25
broad range of midsize million.
companies. Specialty markets
include the corporate aircraft o INVENTORY FINANCE provides
and emerging growth technology inbound and outbound inventory
industries, primarily financing, combined
biotechnology and electronics. inventory/accounts receivable
Typical transaction sizes range lines of credit and purchase
from $500,000 to $15 million. order financing for equipment
distributors, value-added
o COMMERCIAL FINANCE offers resellers and dealers
collateral- oriented revolving nationwide. Transaction sizes
credit facilities and term generally range from $500,000
loans for manufacturers, to $30 million.
distributors, wholesalers and
service companies. Typical o PORTFOLIO SERVICES provides
transaction sizes range from customized receivable servicing
$500,000 to $3 million. and collections for timeshare
developers and other generators
o COMMERCIAL REAL ESTATE FINANCE of consumer receivables.
provides term financing for
hotel, anchored retail, office o PUBLIC FINANCE provides
and owner-occupied properties. tax-exempt term financing to
Typical transaction sizes range state and local governments and
from $5 million to $25 million. non-profit corporations.
Typical transaction sizes range
o COMMUNICATIONS FINANCE from $100,000 to $5 million.
specializes in term financing
to advertising and subscriber- o REDISCOUNT FINANCE offers
supported businesses including revolving credit facilities to
radio and television stations, the independent consumer
cable operators, outdoor finance industry including
advertising firms and sales, automobile, mortgage and
publishers. Typical transaction premium finance companies.
sizes range from $1 million to Typical transaction sizes range
$40 million. from $1 million to $40 million.
o CORPORATE FINANCE provides a o RESORT FINANCE focuses on
full range of cash construction, acquisition and
flow-oriented and asset-based receivables financing of
term and revolving loan timeshare resorts worldwide as
products for manufacturers, well as term financing for
wholesalers, distributors, established golf resort hotels
specialty retailers, and and receivables funding for
commercial and consumer service developers of second home
businesses. Typical transaction communities. Typical
sizes range from $2 million to transaction areas range from $5
$40 million. million to $35 million.
o FACTORING SERVICES offers full o TRANSPORTATION FINANCE
service factoring and accounts structures equipment loans,
receivable management services leases, acquisition financing
for entrepreneurial and larger and leveraged lease equity
firms, primarily in the textile investments for commercial and
and apparel industries. cargo airlines worldwide,
railroads and operators of
other transportation related
equipment. Typical transaction
sizes range from $5 million to
$30 million.
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o FINOVA INVESTMENT ALLIANCE successor to a California corporation
provides or intends to provide that was formed in 1954. Our
equity and mezzanine debt principal executive offices are
financing for midsize located at 1850 N. Central Avenue,
businesses in partnership with P.O. Box 2209, Phoenix, Arizona
institutional investors and 85002-2209. Our telephone number is
selected fund sponsors. Typical (602) 207-6900. All of our capital
transaction sizes range from $2 stock is owned by The FINOVA Group
million to $15 million. Inc. whose stock is traded on the New
York Stock Exchange.
FINOVA Capital Corporation, a
Delaware cor- poration, was
incorporated in 1965 and is the
RATIO OF INCOME TO FIXED CHARGES
THREE
MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
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1997 1996 1995 1994 1993 1992
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1.54 1.50 1.44 1.58 1.50 1.37 Income available for fixed charges,
for purposes of computing the above
ratios, consists of income from
Variations in interest rates continuing operations before income
generally do not have a substantial taxes plus fixed charges. Fixed
impact on the ratio because charges consist of interest and
fixed-rate and floating-rate assets related debt expense, and a portion
are generally matched with of rental expense determined to be
liabilities of similar rate and term. representative of interest.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained
in this Prospectus and any our efforts to implement our business
Supplements, including information strategy, the effect of economic
incorporated by reference, discuss conditions, the performance of our
future expectations, contain borrowers, actions of our competitors
projections of results of operation and our ability to respond to those
or financial condition or state other actions, the cost of our capital,
forward-looking information. Known which may depend in part on our
and unknown risks, uncertainties and portfolio quality, ratings, prospects
other factors could cause the actual and outlook, changes in governmental
results to differ materially from regulation, tax rates and similar
those contemplated by those matters, the results of litigation,
statements. The forward-looking the ability to attract and retain
information is based on various quality employees and other risks
factors and was derived using detailed in our other filings with
numerous assumptions. the SEC. We do not promise to update
forward- looking information to
Important factors that may cause reflect 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.
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DESCRIPTION OF THE SECURITIES
We will issue the securities under We may authorize and determine the
an Indenture dated as of October 1, terms of a series of securities by
1995, as supplemented and amended resolution of our board of directors
from time to time, between us and The or one of its committees or through a
Bank of New York (formerly First supplemental indenture.
Interstate Bank, N.A.), as Trustee.
The Indenture is filed as an exhibit FORM OF SECURITIES
to the registration statement of
which this Prospectus is a part. To The securities will be issued in
obtain a copy of the Indenture, see registered form. Unless the
"Where You Can Find More Supplement otherwise provides,
Information." The following securities will be issued as one or
description is a brief summary of and more global securities. This means
is subject to all the terms of the that we will not issue certificates
Indenture. to each holder. We will generally
issue global securities in the total
GENERAL principal amount of the securities
distributed in that series. We will
The securities offered by this issue securities only in
Prospectus will be limited to $1.5 denominations of $1,000 or integral
billion principal amount. The multiples of that amount, unless the
Indenture does not limit the amount Supplement states otherwise.
of securities we could offer under
it. We can issue securities in one or GLOBAL SECURITIES
more series, in each case as
authorized by us from time to time. IN GENERAL. Securities in global
Each series may differ as to their form will be deposited with or on
terms. The securities will be our behalf of a depositary. Global
unsecured general obligations and securities are represented by one or
will not be subordinated to our other more global certificates for the
general indebtedness. series registered in the name of the
depositary or its nominee. Securities
The Supplement will address the in global form may not be transferred
following terms of the securities: except as a whole among the
depositary, a nominee of or a
o Their title. successor to the depositary and any
nominee of that successor. Unless
o Any limits on the principal otherwise identified in the
amounts to be issued. Supplement, the depositary will be
The Depositary Trust Company.
o The dates on which the
principal is payable. NO DEPOSITARY OR GLOBAL
SECURITIES. If a depositary for a
o The rates (which may be fixed series is unwilling or unable to
or variable) at which they continue as depositary, and a
shall bear interest, or the successor is not appointed by us
method for determining rates. within 90 days, we will issue
securities of that series in
o The dates from which the definitive form in exchange for the
interest will accrue and will global security or securities of that
be payable, or the method of series. We may also determine at any
determining those dates, and time in our discretion not to use
any record dates for the global securities for any series. In
payments due. that event, we will issue securities
in definitive form.
o Any provisions for redemption
at our option or otherwise, OWNERSHIP OF THE GLOBAL
including the periods, prices SECURITIES/ BENEFICIAL OWNERSHIP. So
and terms of redemption. long as the depositary or its nominee
is the registered owner of a global
o Any sinking fund or similar security, that entity will be the
provisions, whether mandatory sole holder of the securities
or at the holder's option, represented by that instrument.
along with the periods, prices FINOVA and the Trustee are only
and terms of redemption, required to treat the depositary or
purchase or repayment. its nominee as the legal owner of
those securities for all purposes
o The amount or percentage under the Indenture.
payable if we accelerate their
maturity, if other than the Each actual purchaser of
principal amount. securities represented by a global
security (a "beneficial owner") will
o Any changes to the events of not be entitled to receive physical
default or covenants set forth delivery of certificated securities,
in the Indenture. will not be considered the holders of
those securities for any purpose
o Any other terms consistent with under the Indenture, and will not be
the Indenture. able to transfer or exchange the
global securities, unless this
Prospectus or the Supplement
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provide to the contrary. As a result, DTC ACTIVITIES. DTC holds
each beneficial owner must rely on securities that its participants
the procedures of the depositary to deposit with it. DTC also facilitates
exercise any rights of a holder under the settlement among participants of
the Indenture. In addition, if the securities transactions, such as
beneficial owner is not a direct or transfers and pledges, in deposited
indirect participant in the securities through electronic
depositary (each a "participant"), computerized book-entry changes in
the beneficial owner must rely on the participant's accounts. Doing so
procedures of the participant through eliminates the need for physical
which it owns its beneficial interest movement of securities certificates.
in the global security.
PARTICIPANT'S RECORDS. Except as
The laws of some jurisdictions otherwise provided in this Prospectus
require that certain purchasers of or a Supplement, purchases of the
securities take physical delivery of securities must be made by or through
the securities in certificated form. direct participants, which will
Those laws and the above conditions receive a credit for the securities
may impair the ability to transfer on the depositary's records. The
beneficial interests in the global beneficial owner's ownership interest
securities. is in turn to be recorded on the
direct and indirect participant's
THE DEPOSITORY TRUST COMPANY records. Beneficial owners will not
receive written confirmations from
The following is based on the depositary of their purchase, but
information furnished by The they are expected to receive them,
Depository Trust Company ("DTC") and along with periodic statements of
applies to the extent it is the their holdings, from the direct or
depositary, unless otherwise stated indirect participants through whom
in a Supplement: they entered into the transaction.
REGISTERED OWNER. The securities Transfers of interests in the
will be issued as fully registered global securities will be made on the
securities in the name of Cede & Co. books of the participants on behalf
(DTC's partnership nominee). One of the beneficial owners.
fully registered global security Certificates representing the
generally will be issued for each interest of the beneficial owners in
$200 million principal amount of the securities will not be issued
securities. The Trustee will deposit unless the use of global securities
the global securities with the is suspended as provided above.
depositary. The deposit of the global
securities with DTC and its The depositary has no knowledge of
registration in the name of Cede & the actual beneficial owners of the
Co. will not change the beneficial global securities. Its records only
ownership of the securities. reflect the identity of the direct
participants as owners of the
DTC ORGANIZATION. The Depository securities. Those participants may or
Trust Company is a limited-purpose may not be the beneficial owners.
trust company organized under the New Participants are responsible for
York Banking Law, a "banking keeping account of their holdings on
organization" within the meaning of behalf of their customers.
that law, a member of the Federal
Reserve System, a "clearing NOTICES AMONG THE DEPOSITARY,
corporation" within the meaning of PARTICIPANTS AND BENEFICIAL OWNERS.
the New York Uniform Commercial Code, Notices and other communications by
and a "clearing agency" registered the depositary, its participants and
under the provisions of Section 17A the beneficial owners will be
of the Securities Exchange Act of governed by arrangements among them,
1934, as amended. 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
clearing corporations and certain to 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 PAYMENTS. Principal and interest
DTC's system by clearing transactions payments made by us will be delivered
through or maintaining a custodial to the depositary. DTC's practice is
relationship with direct to credit direct participants'
participants, either directly or accounts on the applicable payment
indirectly. The rules applicable to date unless it has reason to
DTC and its participants are on file
with the SEC.
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believe it will not receive payment If any payments of principal,
on that date. Payments by premium or interest are not claimed
participants to beneficial owners within three years of the date the
will be governed by standing payment became due, those funds are
instructions and customary practices, to be repaid to us. The beneficial
as is the case with securities held owners of those interests will
for customers in bearer form or thereafter look only to us for
registered in "street name." Those payment for those amounts.
payments will be the responsibility
of that participant, not the CERTAIN INDENTURE PROVISIONS
depositary, the Trustee or us,
subject to any legal requirements in CERTAIN DEFINITIONS. The following
effect at that time. is a summary of certain terms defined
in the Indenture. Those terms shall
We are responsible for payment of be determined in accordance with
principal, interest and premium, if generally accepted accounting
any, to the Trustee, who is principles, unless otherwise
responsible to pay it to the indicated.
depositary. The depositary is
responsible for disbursing those "Consolidated Net Tangible Assets"
payments to direct participants. The means the total of all assets
participants are responsible for reflected on the most recent
disbursing payments to the beneficial quarterly or annual consolidated
owners. balance sheet of us and our
consolidated Subsidiaries, at their
TRANSFER OR EXCHANGE OF SECURITIES net book values (after deducting
related depreciation, depletion,
You may transfer or exchange the amortization and all other valuation
securities (other than a global reserves), less the aggregate of our
security) without service charge at current liabilities and those of our
our office designated for that consolidated Subsidiaries reflected
purpose or at the office of any on that balance sheet. We exclude
transfer agent or security registrar from assets goodwill, unamortized
identified under the Indenture. You debt discount and all other like
must execute a proper form of intangible assets. For purposes of
transfer and pay any taxes and other this definition, "current
governmental charges resulting from liabilities" include all indebtedness
that action. You may transfer or for money borrowed, incurred, issued,
exchange the securities other than a assumed or guaranteed by us and our
global security initially at our consolidated Subsidiaries, and other
offices at 1850 N. Central Avenue, payables and accruals, in each case
P.O. Box 2209, Phoenix, Arizona payable on demand or due within one
85002-2209 or at our office or agency year of the date of determination,
established for that purpose in New but shall exclude any portion of
York, New York. long-term debt maturing within one
year of that date of determination,
Securities in the several all as reflected on the consolidated
denominations will be interchangeable balance sheet of us and our
without service charge, but we may consolidated Subsidiaries.
require payment to cover taxes and
other governmental charges. The "Lien" means any lien, charge,
Trustee will initially act as claim, security interest, pledge,
authenticating agent under the hypothecation, right of another under
Indenture. 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, Subsidiary a majority of the Voting
against surrender of the securities Stock of which is owned, directly, by
at the principal office of the us or by one or more Restricted
Trustee in New York, New York. We Subsidiaries or by us and one or more
will pay any installment of interest Restricted Subsidiaries and which is
on securities to the record holder on designated as such by resolution of
the record date for that interest. We our Board of Directors.
can make those payments through the
Trustee, as noted above, by check "Unrestricted Subsidiary" means
mailed by first class mail to the any Subsidiary other than a
registered holders at their Restricted Subsidiary.
registered address or by wire
transfer to an eligible account of "Voting Stock" means stock of any
the registered holder. class or classes (however designated)
having ordinary voting
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power for the election of a majority o Leasehold or purchase rights,
of the members of the board of exercisable for fair
directors (or any governing body) of consideration, arising in the
that corporation, other than stock ordinary course of business.
having that power only by reason of
the happening of a contingency. o Liens on property or securities
existing when an entity becomes
LIMITATION ON LIENS. The Indenture a Restricted Subsidiary or
provides that FINOVA and its merges with us or a Restricted
Restricted Subsidiaries will not Subsidiary, provided it is not
create, assume, incur or allow to be incurred in anticipation of
created, assumed or incurred or to those events.
exist any Lien on any of our or their
properties unless we secure the o Liens on property or securities
securities equally and ratably with existing at the time of
any other obligation so secured. The acquisition.
Indenture contains the following
exceptions to that prohibition: o Liens in a total amount less
than $25 million, excluding
o Leases of property in the Liens covered by the exceptions
ordinary course of business or noted above.
if the property is not needed
in the operation of our o Liens securing indebtedness of
business. us or a Restricted Subsidiary
provided those and similar
o Purchase money security Liens on indebtedness do not
interests that are non-recourse exceed 10% of Consolidated Net
to us or our Restricted Tangible Assets, excluding
Subsidiaries except to the certain preexisting
extent of the property so indebtedness and those Liens
acquired or any proceeds from permitted above.
that property, or both.
o Governmental deposits or MERGER, CONSOLIDATION AND SALE OF
security as a condition to the ASSETS. We can not merge with or
transaction of business or the into, consolidate with, sell or lease
exercise of a privilege, or to all or substantially all of our
maintain self- insurance, or to assets to, or purchase all or
participate in any fund in substantially all the assets of
connection with worker's another corporation unless we will be
compensation, unemployment the surviving corporation or the
insurance, pensions, social successor is incorporated in the U.S.
security, or for appeal bonds. and assumes all of our obligations
under the securities and the
o Liens for taxes or assessments Indenture, provided that immediately
not yet due or which are after that transaction, no default
payable without a penalty or will exist. A purchase by a
are being contested in good Subsidiary of all or substantially
faith and with adequate all the assets of another corporation
reserves, so long as will not be a purchase of those
foreclosure or similar assets by us. If, however, any of the
proceedings are not commenced. transactions noted in this paragraph
occurs and results in a Lien on any
o Judgment Liens that have not of our properties (except as
remained undischarged or permitted above), we must
unstayed for more than 6 simultaneously secure the securities
months. equally and ratably with the debt
secured by that Lien.
o Incidental or undetermined
construction, mechanics or MODIFICATION OF THE INDENTURE.
similar Liens arising in the FINOVA and the Trustee may amend the
ordinary course of business Indenture without consent of the
relating to obligations not holders of securities to do certain
overdue or which are being things, such as establishing the form
contested by us or a Restricted and terms of any series of
Subsidiary in good faith and securities. We must obtain consent of
deposits for release of such holders of at least two-thirds of the
Liens. outstanding securities affected by a
change to amend the terms of the
o Zoning restrictions, licenses, Indenture or any supplemental
easements and similar indenture or the rights of the
encumbrances or defects if holders of those securities.
immaterial.
Unanimous consent is required for
o Other Liens immaterial in the changes to extend the fixed maturity
aggregate incidental to our or of any securities, reduce the
the Restricted Subsidiary's principal, redemption premium or rate
business or property, other of interest, extend the time of
than for indebtedness. payment of interest, change the form
of currency or to limit the right to
o Banker's liens and set off sue for payment on or after maturity
rights in the ordinary course of the securities. Unanimous consent
of business. is also required to reduce the level
of consents
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needed to approve any such change. vested in it by the Indenture at
The Trustee must consent to changes the request, order or direction of
modifying its rights, duties or any holder unless one or more of
immunities. them shall have offered reasonable
indemnity to the Trustee.
DEFAULTS. Events of default under
the Indenture for any series are: If an event of default occurs
and is continuing, the Trustee may
o Failure for 30 days to pay reimburse itself for its
interest on any securities of reasonable compensation and
that series. expenses incurred out of any sums
held or received by it before
o Failure to pay principal (other making any payments to the holders
than sinking fund redemptions) of the securities of the defaulted
or premium, if any, on series.
securities of that series.
The right of any holders of
o Failure for 30 days to pay any securities of a series to commence
sinking fund installment on an action for any remedy is
that series. subject to certain conditions,
including the requirement that the
o Violation of a covenant under holders of at least 25% of that
the Indenture pertaining to series request that the Trustee
that series that persists for take such action, and offer
at least 90 days after we are reasonable indemnity to the
notified by the Trustee or the Trustee against its liabilities
holders of 25% of the series. incurred in doing so.
o Default in other instruments or DEFEASANCE
under any other series of
securities resulting in We may defease the securities of a
acceleration of indebtedness series, meaning we would satisfy our
over $15 million, unless that duties under that series before
default is rescinded or maturity. We may do so by depositing
discharged within 10 days after with the Trustee, in trust for the
written notice by the Trustee benefit of the holders, either enough
or the holders of 10% of that funds to pay, or direct U.S.
series. government obligations that, together
with the income on those obligations
o Bankruptcy, insolvency or (without considering any
similar event. reinvestment), will be sufficient to
pay, the obligation of that series,
o Any other event of default with including principal, premium, if any,
respect to the securities of and interest. Certain other
that series. conditions must be met before we may
do so. We must deliver an opinion of
If an event of default occurs counsel that the holders of that
and continues, the Trustee or the series will have no Federal income
holders of at least 25% of the tax consequences as a result of that
series may declare those deposit.
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
obligation to exercise any of the
rights or powers
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 the underwriters to indemnity against
will identify those underwriters, certain civil liabilities under the
dealers or agents and will describe Federal securities laws and other
that plan of distribution. Firms not laws, provide that their obligations
so named will have no direct or to purchase the securities will be
indirect participation in any subject to certain conditions, and
underwriting of those securities, generally require them to purchase
although a firm may participate in all of the securities if any are
the distribution of securities under purchased.
circumstances entitling it to a
dealer's allowance or agent's Unless otherwise noted in the
commission. 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 creates a short position. Stabilizing
at varying prices set by those transactions permit bids to purchase
dealers 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 securities in the open market after
their appointment, meaning they are the distribution is completed to
not obligated to purchase the cover short positions. Penalty bids
securities. permit the underwriters to reclaim a
selling concession from a dealer when
Dealers and agents may be entitled the securities originally sold by the
to indemnification as underwriters by dealer are purchased in a covering
us against certain liabilities under transaction to cover short positions.
the Federal securities laws and other Those activities may cause the price
laws. of the securities to be higher than
it would otherwise be. If commenced,
We or the underwriters or agents the underwriters may discontinue
may solicit offers by institutions those activities at any time.
approved by us to purchase securities
under contracts providing for payment The Supplement will set forth the
in the future. Permitted institutions anticipated delivery date of the
include commercial and savings banks, securities being sold at that time.
insurance companies, pension funds,
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, 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
HAVE AUTHORIZED NO ONE TO PROVIDE YOU FINOVA
WITH DIFFERENT INFORMATION.
FINOVA
WE ARE NOT MAKING AN OFFER OF THESE CAPITAL
SECURITIES IN ANY LOCATION WHERE THE CORPORATION
OFFER IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE 6.90% Notes
INFORMATION IN THIS PROSPECTUS OR IN Due June 19, 2004
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.
------------------
TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE
----
PROSPECTUS SUPPLEMENT Deutsche Morgan Grenfell
FINOVA Capital Corporation ........ S-2 NationsBanc Capital
Note Terms ........................ S-2 Markets, Inc.
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 Forward-Looking
Statements ........................ 4
Use of Proceeds .................... 4
Description of the Securities ...... 5
Plan of Distribution ............... 9
Legal Matters ...................... 10
Experts ............................ 10
