Prospectus Supplement FINOVA(R)
(To Prospectus dated July 23, 1997)
$100,000,000 FINOVA Capital Corporation
6.50% Notes Due 1850 N. Central Avenue
July 28, 2002 P.O. Box 2209
Phoenix, Arizona 85002-2209
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TERMS OF NOTES
* Interest paid on January 28 and * Global security held by The
July 28, accruing from the date we Depository Trust Company,
issue the Notes. generally.
* First interest payment date on * No redemption before maturity. No
January 28, 1998. sinking fund.
For more details, see "Note Terms" and "Description of the Securities."
TERMS OF SALE
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions FINOVA(2)
------------- --------------- ------------
Per Note..................... 99.848% 0.500% 99.348%
Total ....................... $99,848,000 $500,000 $99,348,000
- ------------
(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 July 28, 1997, subject to
conditions.
BancAmerica Securities, Inc. First Union Capital Markets Corp.
July 23, 1997
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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 * Commercial Equipment Finance
leasing products to commercial
enterprises in focused market niches, * Commercial Finance
principally in the U.S. We concentrate
on lending to midsize businesses and * Commercial Real Estate Finance
have been in operation for over 42
years. * Communications Finance
FINOVA extends revolving credit * Corporate Finance
facilities, term loans, and equipment
and real estate financing to * Factoring Services
"middle-market" businesses with
financing needs falling generally * Franchise Finance
between $500,000 and $35 million.
* Healthcare Finance
We operate in 15 specific industry
or market niches in which our * Inventory Finance
expertise in evaluating the
creditworthiness of prospective * Portfolio Services
customers and our ability to provide
value-added services enable us to * Public Finance
differentiate ourselves from our
competitors. That expertise and * Rediscount Finance
ability also enable us to command
product pricing that provides a * Resort Finance
satisfactory spread over our borrowing
costs. * Transportation Finance
* FINOVA Investment Alliance
NOTE TERMS
The following description as of October 1, 1995, between us and
supplements the "Description of the The Bank of New York (as successor to
Securities" section in the Prospectus. First Interstate Bank of Arizona,
The Notes are to be issued as a N.A.), as Trustee.
separate series of securities under
the Indenture dated
Maximum Amount: $100,000,000 principal amount
Maturity: July 28, 2002
Interest Rate: 6.50% per year
Interest Payment Dates: January 28 and July 28, accruing from the date we
issue the Notes. First interest payment date is
January 28, 1998.
Interest Calculations: Based on a 360-day year of twelve 30-day months
Redemption or Sinking Fund: None
Form of Note: One global security, held in the name of The
Depository Trust Company, generally
Settlement and Payment: Same-day -- immediately available funds
Secondary Trading Payments: Same-day -- immediately available funds
S-2
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UNDERWRITING
We have entered into an dealers at that price less a
Underwriting Agreement dated July 23, concession of 0.300%. The Underwriters
1997 with BancAmerica Securities, Inc. or those dealers may allow a discount
and First Union Capital Markets Corp., of 0.250% on sales to certain other
as Underwriters. The agreement dealers. After the initial public
provides that BancAmerica Securities, offering of the Notes, the
Inc. will purchase from us $60 million Underwriters may change the public
principal amount of the Notes and offering price, concession to dealers
First Union Capital Markets Corp. will and discount.
purchase $40 million of the Notes. The
Underwriters will purchase all of The Notes are a new issue of
those Notes if any of the Notes are securities with no established trading
purchased. They need not purchase any market. The Underwriters have advised
Notes unless certain conditions are us that they intend to act as market
satisfied. We have agreed to indemnify makers for the Notes. They are not
the Underwriters against certain obligated to do so, however, and they
liabilities, including civil may discontinue any market making at
liabilities under the Securities Act any time without notice. Neither we
of 1933, or to contribute to payments nor the Underwriters can assure the
which the Underwriters may be required liquidity of any trading market for
to make for those liabilities. the Notes.
The Underwriters advise us that The Underwriters and their
they propose to offer the Notes to the affiliates engage in transactions with
public initially at the offering price or perform services for us in the
set forth on the cover page of this ordinary course of business. Those
Supplement. They may offer the Notes services include investment and
to certain commercial banking transactions and
services.
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions -tion 32 of the Regulation under
Securities Act (Ontario) will not
The Notes will not be qualified apply to you if you are an Ontario
for distribution under the Canadian purchaser. As a result, you would have
securities laws, including the to rely on other available remedies,
qualification requirements of each including common law or U.S. law
province where sales of Notes are rights of action for damages or
made. Any resales of Notes in Canada rescission.
must comply with those laws, or an
exemption from those laws, which will All of our directors and officers,
vary depending on the relevant and the experts named in the
jurisdiction. You are advised to seek Prospectus and this Supplement, as
legal advice prior to any purchase or well as our or their assets, may be
resale of the Notes. located outside of Canada. As a
result, you may not be able to effect
service of process within Canada on us
Representations of Purchasers or them. It may not be possible to
satisfy a judgment against us or them
If you are a purchaser of Notes in in Canada or to enforce a judgment
Canada and you receive a purchase obtained in Canadian courts outside of
confirmation, you will be deemed to Canada.
represent to us, the Underwriters and
your dealer that you are entitled
under provincial securities laws to Notice to British Columbia Residents
purchase the Notes without the benefit
of a prospectus qualified under the If you are a purchaser of Notes
securities laws of Canada. If required and if the Securities Act (British
by law, you will also represent that Columbia) applies, we advise you that
you are purchasing the Notes as a you are required to file a report with
principal and not as an agent. You the British Columbia Securities
will also represent that you have Commission within 10 days of the sale
reviewed the text above under "Resale of any Notes acquired by you under
Restrictions." If you are purchasing this offering. The report must be in
the Notes in British Columbia, you the form attached to that commission's
will also represent that you are not Blanket Order #95/17, a copy of which
purchasing them as an individual. may be obtained from us or the
Underwriters. You need only file one
report for Notes acquired on the same
Rights of Action (Ontario Purchasers) day under the same prospectus
exemption.
The Notes are offered by a foreign
issuer, so the contractual rights of
action prescribed by sec
S-3
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Taxation and Eligibility for Investment
You should consult your own legal the Notes in your circumstances and
and tax advisors about the whether you are eligible to buy them
consequences of investing in under Canadian law.
LEGAL MATTERS
Richard Lieberman, Esq., Assistant Brown & Wood, LLP will act as counsel
General Counsel of FINOVA, will pass for the Underwriters.
on the legality of the securities
offered through this Supplement.
S-4
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Prospectus FINOVA(R)
- ----------
FINOVA(R) CAPITAL CORPORATION
Senior Debt Securities
We may offer from time to time the securities in one or more series,
under this Prospectus up to $1.5 with the same or various maturities,
billion principal amount of our senior at or above par or with original issue
debt securities ("securities") on discount, and in fully registered form
terms to be determined at the time of or the form of one or more global
sale. We may issue securities.
Prospectus Supplement
The Supplement to the Prospectus tained in this Prospectus. It is
for each offering of securities will important that you read both this
contain the specific information and Prospectus and the Supplement before
terms for that offering. The you invest.
Supplement may also add, update or
change information con-
----------------
The securities have not been approved
or disapproved by the SEC or any state
securities commission.
None of those authorities has We may offer the securities directly
determined that this Prospectus is or through underwriters, agents or
accurate or complete. dealers. The Supplement will describe
the terms of that plan of
Any representation to the contrary is distribution. "Plan of Distribution"
a criminal offense. below also provides more information
on this topic.
July 23, 1997
<PAGE>
Certain persons participating in this offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities offered
under this Prospectus. Those transactions include over-allotment, stabilizing
transactions, short covering transactions and penalty bids. For a description of
those activities, see "Plan of Distribution" in the Prospectus. If begun, they
may discontinue those activities at any time.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and Securities Exchange Act of 1934 until
current reports, proxy statements and this offering is completed:
other information with the SEC. You
may read and copy any document we file * Annual Report of Form 10-K for
at the SEC's public reference rooms in the year ended December 31,
Washington, D.C., New York, New York 1996.
and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for more * Portions of our Proxy Statement
information on the public reference on Schedule 14A for the Annual
rooms and their copy charges. Our SEC Meeting of Shareholders held on
filings are also available to the May 8, 1997 that have been
public from the SEC's web site at incorporated by reference into
http://www.sec.gov. You may also our 10-K.
inspect our SEC reports and other
information at the New York Stock * Quarterly Report on Form 10-Q
Exchange, 20 Broad Street, New York, for the quarter ended March 31,
New York 10005. 1997.
The SEC allows us to "incorporate * Current Reports on Form 8-K
by reference" the information we file dated April 18, and July 16,
with them, which means we can disclose 1997.
information to you by referring you to
those documents. Information
incorporated by reference is part of You may request a copy of those
this Prospectus. Later information filings, other than exhibits, at no
filed with the SEC updates and cost, by contacting us at:
supersedes this Prospectus.
Treasurer
We incorporate by reference the FINOVA Capital Corporation
documents listed below and any future 1850 N. Central Avenue
filings made with the SEC under P.O. Box 2209
Sections 13(a), 13(c), 14 or 15(d) of Phoenix, Arizona 85002-2209
the (602) 207-6900
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation, our ability to provide value-added
formerly known as Greyhound Financial services enable us to differentiate
Corporation ("FINOVA" or "us"), is a ourselves from our competitors. That
financial services company that expertise and ability also enable us
provides collateralized financing and to command product pricing that
leasing products to commercial provides a satisfactory spread over
enterprises in focused market niches, our borrowing costs.
principally in the U.S. We concentrate
on lending to midsize businesses and We seek to maintain a high quality
have been in operation for over 42 portfolio and to minimize non-earning
years. assets and write-offs. We use clearly
defined underwriting criteria and
FINOVA extends revolving credit stringent portfolio management
facilities, term loans, and equipment techniques. We diversify our lending
and real estate financing to activities geographically and among a
"middle-market" businesses with range of industries, customers and
financing needs falling generally loan products.
between $500,000 and $35 million.
Due to the diversity of our
We operate in 15 specific industry portfolio, we believe we are better
or market niches in which our able to manage competitive changes in
expertise in evaluating the our markets and to withstand the
credit-worthiness of prospective impact of de-
customers and
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teriorating economic conditions on a * Factoring Services offers full
regional or national basis. There can service factoring and accounts
be no assurance, however, that receivable management services
competitive changes, borrowers' for entrepreneurial and larger
performance, economic conditions or firms, primarily in the textile
other factors will not result in an and apparel industries. The
adverse impact on our results of annual factored volume of these
operations or financial condition. companies is generally between
$5 million and $25 million. This
FINOVA generates interest and line provides accounts
other income through charges assessed receivable and inventory
on outstanding loans, loan servicing, financing and loans secured by
leasing and other fees. Our primary equipment and real estate.
expenses are the costs of funding our
loan and lease business, including * Franchise Finance offers
interest paid on debt, provisions for equipment, real estate and
possible credit losses, marketing acquisition financing for
expenses, salaries and employee operators of established
benefits, servicing and other franchise concepts. Transaction
operating expenses and income taxes. sizes generally range from
$500,000 to $15 million.
Lines of Business * Healthcare Finance offers a full
range of working capital,
We operate the following principal equipment and real estate
lines of business: financing products for the U.S.
health care industry.
* Commercial Equipment Finance Transaction sizes typically
offers equipment leases, loans range from $500,000 to $25
and "turnkey" financing to a million.
broad range of midsize
companies. Specialty markets * Inventory Finance provides
include the corporate aircraft inbound and outbound inventory
and emerging growth technology financing, combined
industries, primarily inventory/accounts receivable
biotechnology and electronics. lines of credit and purchase
Typical transaction sizes range order financing for equipment
from $500,000 to $15 million. distributors, value-added
resellers and dealers
* Commercial Finance offers nationwide. Transaction sizes
collateral-oriented revolving generally range from $500,000 to
credit facilities and term loans $30 million.
for manufacturers, distributors,
wholesalers and service * Portfolio Services provides
companies. Typical transaction customized receivable servicing
sizes range from $500,000 to $3 and collections for timeshare
million. developers and other generators
of consumer receivables.
* Commercial Real Estate Finance
provides term financing for * Public Finance provides
hotel, anchored retail, office tax-exempt term financing to
and owner-occupied properties. state and local governments and
Typical transaction sizes range non-profit corporations. Typical
from $5 million to $25 million. transaction sizes range from
$100,000 to $5 million.
* Communications Finance
specializes in term financing to * Rediscount Finance offers
advertising and subscriber- revolving credit facilities to
supported businesses including the independent consumer finance
radio and television stations, industry including sales,
cable operators, outdoor automobile, mortgage and premium
advertising firms and finance companies. Typical
publishers. Typical transaction transaction sizes range from $1
sizes range from $1 million to million to $40 million.
$40 million.
* Resort Finance focuses on
* Corporate Finance provides a construction, acquisition and
full range of cash flow-oriented receivables financing of
and asset-based term and timeshare resorts worldwide as
revolving loan products for well as term financing for
manufacturers, wholesalers, established golf resort hotels
distributors, specialty and receivables funding for
retailers, and commercial and developers of second home
consumer service businesses. communities. Typical transaction
Typical transaction sizes range sizes range from $5 million to
from $2 million to $40 million. $35 million.
* Transportation Finance
structures equipment loans,
leases, acquisition financing
and leveraged lease equity
investments for
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commercial and cargo airlines FINOVA Capital Corporation, a
worldwide, railroads and Delaware corporation, was
operators of other incorporated in 1965 and is the
transportation related successor to a California corporation
equipment. Typical transaction that was formed in 1954. Our principal
sizes range from $5 million to executive offices are located at 1850
$30 million. N. Central Avenue, P.O. Box 2209,
Phoenix, Arizona 85002-2209. Our
* FINOVA Investment Alliance telephone number is (602) 207-6900.
provides equity and mezzanine All of our capital stock is owned by
debt financing for midsize The FINOVA Group Inc. whose stock is
businesses in partnership with traded on the New York Stock Exchange.
institutional investors and
selected fund sponsors. Typical
transaction sizes range from $2
million to $15 million.
RATIO OF INCOME TO FIXED CHARGES
Three
Months
Ended
March 31, Year Ended December 31,
- --------- ----------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- Income available for fixed charges,
1.54 1.50 1.44 1.58 1.50 1.37 for purposes of computing the above
ratios, consists of income from
Variations in interest rates generally continuing operations before income
do not have a substantial impact on taxes plus fixed charges. Fixed
the ratio because fixed-rate and charges consist of interest and
floating-rate assets are generally related debt expense, and a portion of
matched with liabilities of similar rental expense determined to be
rate and term. representative of interest.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained egy, the effect of economic
in this Prospectus and any conditions, the performance of our
Supplements, including information borrowers, actions of our competitors
incorporated by reference, discuss and our ability to respond to those
future expectations, contain actions, the cost of our capital,
projections of results of operation or which may depend in part on our
financial condition or state other portfolio quality, ratings, prospects
forward-looking information. Known and and outlook, changes in governmental
unknown risks, uncertainties and other regulation, tax rates and similar
factors could cause the actual results matters, the results of litigation,
to differ materially from those the ability to attract and retain
contemplated by those statements. The quality employees and other risks
forward-looking information is based detailed in our other filings with the
on various factors and was derived SEC. We do not promise to update
using 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 our
efforts to implement our business
strat-
USE OF PROCEEDS
We intend to use the net proceeds financing transactions and capital
from the sale of the securities for expenditures. We will describe in the
general corporate purposes. Those Supplement any proposed use of
purposes include the repayment or proceeds other than for general
refinancing of debt, acquisitions in corporate purposes.
the ordinary course of business,
working capital, investment in
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DESCRIPTION OF THE SECURITIES
We will issue the securities under * Any other terms consistent with
an Indenture dated as of October 1, the Indenture.
1995, as supplemented and amended from
time to time, between us and The Bank We may authorize and determine the
of New York (formerly First Interstate terms of a series of securities by
Bank, N.A.), as Trustee. The Indenture resolution of our board of directors
is filed as an exhibit to the or one of its committees or through a
registration statement of which this supplemental indenture.
Prospectus is a part. To obtain a copy
of the Indenture, see "Where You Can
Find More Information." The following Form of Securities
description is a brief summary of and
is subject to all the terms of the The securities will be issued in
Indenture. registered form. Unless the Supplement
otherwise provides, securities will be
issued as one or more global
General securities. This means that we will
not issue certificates to each holder.
The securities offered by this We will generally issue global
Prospectus will be limited to $1.5 securities in the total principal
billion principal amount. The amount of the securities distributed
Indenture does not limit the amount of in that series. We will issue
securities we could offer under it. We securities only in denominations of
can issue securities in one or more $1,000 or integral multiples of that
series, in each case as authorized by amount, unless the Supplement states
us from time to time. Each series may otherwise.
differ as to their terms. The
securities will be our unsecured
general obligations and will not be Global Securities
subordinated to our other general
indebtedness. In General. Securities in global
form will be deposited with or on
The Supplement will address the behalf of a depositary. Global
following terms of the securities: securities are represented by one or
more global certificates for the
* Their title. series registered in the name of the
depositary or its nominee. Securities
* Any limits on the principal in global form may not be transferred
amounts to be issued. except as a whole among the
depositary, a nominee of or a
* The dates on which the principal successor to the depositary and any
is payable. nominee of that successor. Unless
otherwise identified in the
* The rates (which may be fixed or Supplement, the depositary will be The
variable) at which they shall Depositary Trust Company.
bear interest, or the method for
determining rates. No Depositary or Global
Securities. If a depositary for a
* The dates from which the series is unwilling or unable to
interest will accrue and will be continue as depositary, and a
payable, or the method of successor is not appointed by us
determining those dates, and any within 90 days, we will issue
record dates for the payments securities of that series in
due. definitive form in exchange for the
global security or securities of that
* Any provisions for redemption at series. We may also determine at any
our option or otherwise, time in our discretion not to use
including the periods, prices global securities for any series. In
and terms of redemption. that event, we will issue securities
in definitive form.
* Any sinking fund or similar
provisions, whether mandatory or Ownership of the Global
at the holder's option, along Securities/Beneficial Ownership. So
with the periods, prices and long as the depositary or its nominee
terms of redemption, purchase or is the registered owner of a global
repayment. security, that entity will be the sole
holder of the securities represented
* The amount or percentage payable by that instrument. FINOVA and the
if we accelerate their maturity, Trustee are only required to treat the
if other than the principal depositary or its nominee as the legal
amount. owner of those securities for all
purposes under the Indenture.
* Any changes to the events of
default or covenants set forth Each actual purchaser of
in the Indenture. securities represented by a global
security (a "beneficial owner")
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will not be entitled to receive dealers, banks, trust companies,
physical delivery of certificated clearing corporations and certain
securities, will not be considered the other organizations who directly
holders of those securities for any participate in DTC (each a "direct
purpose under the Indenture, and will participant"). Other entities
not be able to transfer or exchange ("indirect participants") may access
the global securities, unless this DTC's system by clearing transactions
Prospectus or the Supplement provide through or maintaining a custodial
to the contrary. As a result, each relationship with direct participants,
beneficial owner must rely on the either directly or indirectly. The
procedures of the depositary to rules applicable to DTC and its
exercise any rights of a holder under participants are on file with the SEC.
the Indenture. In addition, if the
beneficial owner is not a direct or DTC Activities. DTC holds
indirect participant in the depositary securities that its participants
(each a "participant"), the beneficial deposit with it. DTC also facilitates
owner must rely on the procedures of the settlement among participants of
the participant through which it owns securities transactions, such as
its beneficial interest in the global transfers and pledges, in deposited
security. securities through electronic
computerized book-entry changes in
The laws of some jurisdictions participant's accounts. Doing so
require that certain purchasers of eliminates the need for physical
securities take physical delivery of movement of securities certificates.
the securities in certificated form.
Those laws and the above conditions Participant's Records. Except as
may impair the ability to transfer otherwise provided in this Prospectus
beneficial interests in the global or a Supplement, purchases of the
securities. securities must be made by or through
direct participants, which will
receive a credit for the securities on
The Depository Trust Company the depositary's records. The
beneficial owner's ownership interest
The following is based on is in turn to be recorded on the
information furnished by The direct and indirect participant's
Depository Trust Company ("DTC") and records. Beneficial owners will not
applies to the extent it is the receive written confirmations from the
depositary, unless otherwise stated in depositary of their purchase, but they
a Supplement: are expected to receive them, along
with periodic statements of their
Registered Owner. The securities holdings, from the direct or indirect
will be issued as fully registered participants through whom they entered
securities in the name of Cede & Co. into the transaction.
(DTC's partnership nominee). One fully
registered global security generally Transfers of interests in the
will be issued for each $200 million global securities will be made on the
principal amount of securities. The books of the participants on behalf of
Trustee will deposit the global the beneficial owners. Certificates
securities with the depositary. The representing the interest of the
deposit of the global securities with beneficial owners in the securities
DTC and its registration in the name will not be issued unless the use of
of Cede & Co. will not change the global securities is suspended as
beneficial ownership of the provided above.
securities.
The depositary has no knowledge of
DTC Organization. The Depository the actual beneficial owners of the
Trust Company is a limited-purpose global securities. Its records only
trust company organized under the New reflect the identity of the direct
York Banking Law, a "banking participants as owners of the
organization" within the meaning of securities. Those participants may or
that law, a member of the Federal may not be the beneficial owners.
Reserve System, a "clearing Participants are responsible for
corporation" within the meaning of the keeping account of their holdings on
New York Uniform Commercial Code, and behalf of their customers.
a "clearing agency" registered under
the provisions of Section 17A of the Notices Among the Depositary,
Securities Exchange Act of 1934, as Participants and Beneficial Owners.
amended. Notices and other communications by
the depositary, its participants and
DTC is owned by a number of its the beneficial owners will be governed
direct participants and by the New by arrangements among them, subject to
York Stock Exchange, Inc., the any legal requirements in effect.
American Stock Exchange, Inc. and the
National Association of Securities Voting Procedures. Neither DTC nor
Dealers, Inc. Direct participants Cede & Co. will consent or vote with
include securities brokers and respect to the global
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securities. The depositary generally Payment and Paying Agent
mails an omnibus proxy to us just
after the applicable record date. That If the securities are not held in
proxy assigns Cede & Co.'s consenting global form, we will make payment of
or voting rights to the direct principal and premium, if any, against
participants to whose accounts the surrender of the securities at the
securities are credited at that time. principal office of the Trustee in New
York, New York. We will pay any
Payments. Principal and interest installment of interest on securities
payments made by us will be delivered to the record holder on the record
to the depositary. DTC's practice is date for that interest. We can make
to credit direct participants' those payments through the Trustee, as
accounts on the applicable payment noted above, by check mailed by first
date unless it has reason to believe class mail to the registered holders
it will not receive payment on that at their registered address or by wire
date. Payments by participants to transfer to an eligible account of the
beneficial owners will be governed by registered holder.
standing instructions and customary
practices, as is the case with If any payments of principal,
securities held for customers in premium or interest are not claimed
bearer form or registered in "street within three years of the date the
name." Those payments will be the payment became due, those funds are to
responsibility of that participant, be repaid to us. The beneficial owners
not the depositary, the Trustee or us, of those interests will thereafter
subject to any legal requirements in look only to us for payment for those
effect at that time. amounts.
We are responsible for payment of
principal, interest and premium, if Certain Indenture Provisions
any, to the Trustee, who is
responsible to pay it to the Certain Definitions. The following
depositary. The depositary is is a summary of certain terms defined
responsible for disbursing those in the Indenture. Those terms shall be
payments to direct participants. The determined in accordance with
participants are responsible for generally accepted accounting
disbursing payments to the beneficial principles, unless otherwise
owners. indicated.
"Consolidated Net Tangible Assets"
Transfer or Exchange of Securities means the total of all assets
reflected on the most recent quarterly
You may transfer or exchange the or annual consolidated balance sheet
securities (other than a global of us and our consolidated
security) without service charge at Subsidiaries, at their net book values
our office designated for that purpose (after deducting related depreciation,
or at the office of any transfer agent depletion, amortization and all other
or security registrar identified under valuation reserves), less the
the Indenture. You must execute a aggregate of our current liabilities
proper form of transfer and pay any and those of our consolidated
taxes and other governmental charges Subsidiaries reflected on that balance
resulting from that action. You may sheet. We exclude from assets
transfer or exchange the securities goodwill, unamortized debt discount
other than a global security initially and all other like intangible assets.
at our offices at 1850 N. Central For purposes of this definition,
Avenue, P.O. Box 2209, Phoenix, "current liabilities" include all
Arizona 85002-2209 or at our office or indebtedness for money borrowed,
agency established for that purpose in incurred, issued, assumed or
New York, New York. guaranteed by us and our consolidated
Subsidiaries, and other payables and
Securities in the several accruals, in each case payable on
denominations will be interchangeable demand or due within one year of the
without service charge, but we may date of determination, but shall
require payment to cover taxes and exclude any portion of long-term debt
other governmental charges. The maturing within one year of that date
Trustee will initially act as of determination, all as reflected on
authenticating agent under the the consolidated balance sheet of us
Indenture. and our consolidated Subsidiaries.
"Lien" means any lien, charge,
Same-Day Settlement and Payment claim, security interest, pledge,
hypothecation, right of another under
Unless the Supplement otherwise any conditional sale or other title
provides, the securities will be retention agreement or any other
settled in immediately available encumbrance affecting title to
funds. We will make payments of property. Lien includes any lease
principal and interest in immediately under a sale and leaseback
available funds. arrangement.
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"Subsidiary" means any corporation * Incidental or undetermined
a majority of the Voting Stock of construction, mechanics or
which is owned, directly or similar Liens arising in the
indirectly, by us or by one or more ordinary course of business
Subsidiaries or by us and one or more relating to obligations not
Subsidiaries. overdue or which are being
contested by us or a Restricted
"Restricted Subsidiary" is any Subsidiary in good faith and
Subsidiary a majority of the Voting deposits for release of such
Stock of which is owned, directly, by Liens.
us or by one or more Restricted
Subsidiaries or by us and one or more * Zoning restrictions, licenses,
Restricted Subsidiaries and which is easements and similar
designated as such by resolution of encumbrances or defects if
our Board of Directors. immaterial.
"Unrestricted Subsidiary" means * Other Liens immaterial in the
any Subsidiary other than a Restricted aggregate incidental to our or
Subsidiary. the Restricted Subsidiary's
business or property, other than
"Voting Stock" means stock of any for indebtedness.
class or classes (however designated)
having ordinary voting power for the * Banker's liens and set off
election of a majority of the members rights in the ordinary course of
of the board of directors (or any business.
governing body) of that corporation,
other than stock having that power * Leasehold or purchase rights,
only by reason of the happening of a exercisable for fair
contingency. consideration, arising in the
ordinary course of business.
Limitation on Liens. The Indenture
provides that FINOVA and its * Liens on property or securities
Restricted Subsidiaries will not existing when an entity becomes
create, assume, incur or allow to be a Restricted Subsidiary or
created, assumed or incurred or to merges with us or a Restricted
exist any Lien on any of our or their Subsidiary, provided it is not
properties unless we secure the incurred in anticipation of
securities equally and ratably with those events.
any other obligation so secured. The
Indenture contains the following * Liens on property or securities
exceptions to that prohibition: existing at the time of
acquisition.
* Leases of property in the
ordinary course of business or * Liens in a total amount less
if the property is not needed in than $25 million, excluding
the operation of our business. Liens covered by the exceptions
noted above.
* Purchase money security
interests that are non-recourse * Liens securing indebtedness of
to us or our Restricted us or a Restricted Subsidiary
Subsidiaries except to the provided those and similar Liens
extent of the property so on indebtedness do not exceed
acquired or any proceeds from 10% of Consolidated Net Tangible
that property, or both. Assets, excluding certain
preexisting indebtedness and
* Governmental deposits or those Liens permitted above.
security as a condition to the
transaction of business or the Merger, Consolidation and Sale of
exercise of a privilege, or to Assets. We can not merge with or into,
maintain self-insurance, or to consolidate with, sell or lease all or
participate in any fund in substantially all of our assets to, or
connection with worker's purchase all or substantially all the
compensation, unemployment assets of another corporation unless
insurance, pensions, social we will be the surviving corporation
security, or for appeal bonds. or the successor is incorporated in
the U.S. and assumes all of our
* Liens for taxes or assessments obligations under the securities and
not yet due or which are payable the Indenture, provided that
without a penalty or are being immediately after that transaction, no
contested in good faith and with default will exist. A purchase by a
adequate reserves, so long as Subsidiary of all or substantially all
foreclosure or similar the assets of another corporation will
proceedings are not commenced. not be a purchase of those assets by
us. If, however, any of the
* Judgment Liens that have not transactions noted in this paragraph
remained undischarged or occurs and results in a Lien on any of
unstayed for more than 6 months. our properties (except as permitted
above), we must
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simultaneously secure the securities Holders of a majority of a
equally and ratably with the debt series may control certain actions
secured by that Lien. of the Trustee and may waive past
defaults for that series. Except
Modification of the Indenture. as provided in the Indenture, the
FINOVA and the Trustee may amend the Trustee will not be under any
Indenture without consent of the obligation to exercise any of the
holders of securities to do certain rights or powers vested in it by
things, such as establishing the form the Indenture at the request,
and terms of any series of securities. order or direction of any holder
We must obtain consent of holders of unless one or more of them shall
at least two-thirds of the outstanding have offered reasonable indemnity
securities affected by a change to to the Trustee.
amend the terms of the Indenture or
any supplemental indenture or the If an event of default occurs
rights of the holders of those and is continuing, the Trustee may
securities. reimburse itself for its
reasonable compensation and
Unanimous consent is required for expenses incurred out of any sums
changes to extend the fixed maturity held or received by it before
of any securities, reduce the making any payments to the holders
principal, redemption premium or rate of the securities of the defaulted
of interest, extend the time of series.
payment of interest, change the form
of currency or to limit the right to The right of any holders of
sue for payment on or after maturity securities of a series to commence
of the securities. Unanimous consent an action for any remedy is
is also required to reduce the level subject to certain conditions,
of consents needed to approve any such including the requirement that the
change. The Trustee must consent to holders of at least 25% of that
changes modifying its rights, duties series request that the Trustee
or immunities. 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.
* Failure for 30 days to pay
interest on any securities of Defeasance
that series.
We may defease the securities of a
* Failure to pay principal (other series, meaning we would satisfy our
than sinking fund redemptions) duties under that series before
or premium, if any, on maturity. We may do so by depositing
securities of that series. with the Trustee, in trust for the
benefit of the holders, either enough
* Failure for 30 days to pay any funds to pay, or direct U.S.
sinking fund installment on that government obligations that, together
series. with the income on those obligations
(without considering any
* Violation of a covenant under reinvestment), will be sufficient to
the Indenture pertaining to that pay, the obligation of that series,
series that persists for at including principal, premium, if any,
least 90 days after we are and interest. Certain other conditions
notified by the Trustee or the must be met before we may do so. We
holders of 25% of the series. must deliver an opinion of counsel
that the holders of that series will
* Default in other instruments or have no Federal income tax
under any other series of consequences as a result of that
securities resulting in deposit.
acceleration of indebtedness
over $15 million, unless that
default is rescinded or Concerning the Trustee
discharged within 10 days after
written notice by the Trustee or The Trustee is one of the banks in
the holders of 10% of that one of our credit agreements and from
series. time to time may perform other
banking, trust or related services on
* Bankruptcy, insolvency or behalf of FINOVA or our customers.
similar event.
* Any other event of default with
respect to the securities of
that series.
If an event of default occurs
and continues, the Trustee or the
holders of at least 25% of the
series may declare those
securities due and payable. We are
required to certify to the Trustee
annually as to our compliance with
the Indenture.
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PLAN OF DISTRIBUTION
We may offer the securities We or the underwriters or agents
directly or through underwriters, may solicit offers by institutions
dealers or agents. The Supplement will approved by us to purchase securities
identify those underwriters, dealers under contracts providing for payment
or agents and will describe that plan in the future. Permitted institutions
of distribution. Firms not so named include commercial and savings banks,
will have no direct or indirect insurance companies, pension funds,
participation in any underwriting of investment companies, educational and
those securities, although a firm may charitable institutions and others.
participate in the distribution of Certain conditions apply to those
securities under circumstances purchases.
entitling it to a dealer's allowance
or agent's commission. Any underwriter may engage in
over-allotment, stabilizing
We anticipate that any transactions, short covering
underwriting agreement will entitle transactions and penalty bids in
the underwriters to indemnity against accordance with Regulation M under the
certain civil liabilities under the Securities Exchange Act of 1934.
Federal securities laws and other Over-allotment involves sales in
laws, provide that their obligations excess of the offering size, which
to purchase the securities will be creates a short position. Stabilizing
subject to certain conditions, and transactions permit bids to purchase
generally require them to purchase all the underlying security so long as the
of the securities if any are stabilizing bids do not exceed a
purchased. specified maximum. Short covering
transactions involve purchases of the
Unless otherwise noted in the securities in the open market after
Supplement, the securities will be the distribution is completed to cover
offered by the underwriters, if any, short positions. Penalty bids permit
when, as and if issued by us, the underwriters to reclaim a selling
delivered to and accepted by the concession from a dealer when the
underwriters and subject to their securities originally sold by the
right to reject orders in whole or in dealer are purchased in a covering
part. transaction to cover short positions.
Those activities may cause the price
We may sell securities to dealers, of the securities to be higher than it
as principals. Those dealers may then would otherwise be. If commenced, the
resell the securities to the public at underwriters may discontinue those
varying prices set by those dealers activities at any time.
from time to time.
The Supplement will set forth the
We may also offer the securities anticipated delivery date of the
through agents. Agents generally act securities being sold at that time.
on a "best efforts" basis during their
appointment, meaning they are not
obligated to purchase the securities.
Dealers and agents may be entitled
to indemnification as underwriters by
us against certain liabilities under
the Federal securities laws and other
laws.
LEGAL MATTERS
Unless otherwise noted in a spectus and any Supplement and Brown &
Supplement, William J. Hallinan, Esq., Wood LLP will act as counsel for any
Senior Vice President-General Counsel underwriters or agents.
to FINOVA, will pass on the legality
of the securities offered through this
Pro-
EXPERTS
Deloitte & Touche LLP, independent ended December 31, 1996. The financial
auditors, have audited the financial statements are incorporated into this
statements for FINOVA incorporated in Prospectus by reference in reliance
this Prospectus by reference from our upon their report given upon their
Annual Report on Form 10-K for the authority as experts in accounting and
year auditing.
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You should rely only on the
information contained in or
incorporated by reference in this
Prospectus or in the Supplement. We
have authorized no one to provide you
with different information.
FINOVA(R)
We are not making an offer of these
securities in any location where the
offer is not permitted.
You should not assume that the FINOVA
information in this Prospectus or in Capital
the Supplement, including information Corporation
incorporated by reference, is accurate
as of any date other than the date on
the front of the Prospectus or
Supplement, as applicable.
---------------- 6.50% Notes
Due July 28, 2002
TABLE OF CONTENTS
Page
----
PROSPECTUS SUPPLEMENT
FINOVA Capital Corporation ...... S-2
Note Terms ...................... S-2
Underwriting .................... S-3
PROSPECTUS SUPPLEMENT
Notice to Canadian Residents .... S-3
Legal Matters ................... S-4
PROSPECTUS
Where You Can Find More
Information .................. 2
FINOVA Capital Corporation ...... 2
Ratio of Income to Fixed Charges 4
Special Note Regarding BancAmerica Securities, Inc.
Forward-Looking Statements ... 4
Use of Proceeds ................. 4 First Union
Capital Markets Corp.
Description of the Securities ... 5
Plan of Distribution ............ 10
Legal Matters ................... 10
Experts ......................... 10
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