Filed Pursuant to Rule 424(b)(5)
Registration Nos. 333-38171 and 333-38171-01
Prospectus Supplement FINOVA
(To Prospectus dated August 7, 1998)
- --------------------------------------------------------------------------------
|
| $275,000,000 FINOVA Capital Corporation
| 5 7/8% Notes Due 1850 N. Central Avenue
| October 15, 2001 P.O. Box 2209
| Phoenix, Arizona 85002-2209
|
- --------------------------------------------------------------------------------
| TERMS OF NOTES
|
| * Interest paid on April 15 and * Global security held by The
| October 15, accruing from the date Depository Trust Company,
| we issue the Notes. generally.
|
| * First interest payment date on * No redemption before maturity. No
| April 15, 1999. sinking fund.
|
| For more details, see "Note Terms" and "Description of the Securities."
|
|
| TERMS OF SALE
|
| UNDERWRITING
| PRICE TO DISCOUNTS AND PROCEEDS TO
| PUBLIC COMMISSIONS FINOVA
| ------------- ------------- ------------
| Per Note ...... 99.901% 0.350% 99.551%
|
| Total ......... $274,727,750 $962,500 $273,765,250
|
| ------------
| Accrued interest from the issuance date will be added to the price to
| the public.
|
|
|
| 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 October 21, 1998, subject to
| conditions.
|
|
| DEUTSCHE BANK SECURITIES
|
| CREDIT SUISSE FIRST BOSTON
|
| SALOMON SMITH BARNEY
|
|
| The date of this Prospectus Supplement is October 16, 1998
<PAGE>
FINOVA CAPITAL CORPORATION
FINOVA Capital Corporation Commercial Finance
("FINOVA" or "us") is a financial
services company that provides a broad * Business Credit
range of financing and capital market * Commercial Services
products to mid-size business, * Corporate Finance
principally in the U.S. We concentrate * Growth Finance
on lending to midsize businesses and * Inventory Finance
have been in operation for over 43 * Rediscount Finance
years.
Specialty Finance
FINOVA extends revolving credit
facilities, term loans, and equipment * Commercial Equipment Finance
and real estate financing primarily to * Communications Finance
"middle-market" businesses with * Franchise Finance
financing needs falling generally * Healthcare Finance
between $500,000 and $35 million. * Public Finance
* Portfolio Services
We operate in 16 specific industry * Resort Finance
or market niches under three market * Specialty Real Estate Finance
groups. We selected those groups * Transportation Finance
because our expertise in evaluating the
credit-worthiness of prospective Capital Markets
customers and our ability to provide
value-added services enable us to * FINOVA Realty Capital
differentiate ourselves from our * FINOVA Investment Alliance
competitors. That expertise and ability
also enable us to command product
pricing that provides a satisfactory
spread over our borrowing costs.
FINOVA's principal lines of
business are detailed more fully in the
Prospectus. Those lines include:
NOTE TERMS
The following description separate series of securities under
supplements the "Description of the the Indenture dated as of March 20,
Securities" section in the Prospectus. 1998, between us and The First
The Notes are to be issued as a National Bank of Chicago, as Trustee.
MAXIMUM AMOUNT: $275,000,000 principal amount
MATURITY: October 15, 2001
INTEREST RATE: 5 7/8% per year
INTEREST PAYMENT DATES: April 15 and October 15, accruing from the date we
issue the Notes. First interest payment date is
April 15, 1999.
INTEREST CALCULATIONS: Based on a 360-day year of twelve 30-day months
REDEMPTION OR SINKING FUND: None
FORM OF NOTE: Two global securities, held in the name of The
Depository Trust Company, generally
SETTLEMENT AND PAYMENT: Same-day -- immediately available funds
SECONDARY TRADING PAYMENTS: Same-day -- immediately available funds
S-2
<PAGE>
UNDERWRITING
We have entered into an set forth on the cover page of this
Underwriting Agreement dated Supplement. They may offer the
October 16, 1998 with Deutsche Bank Notes to certain dealers at that
Securities Inc., Credit Suisse price less a concession of 0.210%.
First Boston Corporation and The Underwriters or those dealers
Salomon Smith Barney Inc., as may allow a discount of 0.110% on
Underwriters. The agreement sales to certain other dealers.
provides that Deutsche Bank After the initial public offering
Securities Inc. will purchase from of the Notes, the Underwriters may
us $110,000,000 principal amount of change the public offering price,
the Notes and Credit Suisse First concession to dealers and discount.
Boston Corporation and Salomon
Smith Barney Inc. will each The Notes are a new issue of
purchase $82,500,000 of the Notes. securities with no established
The Underwriters will purchase all trading market. The Underwriters
of the Notes if any of the Notes have advised us that they intend to
are purchased. They need not act as market makers for the Notes.
purchase any Notes unless certain They are not obligated to do so,
conditions are satisfied. We have however, and they may discontinue
agreed to indemnify the any market making at any time
Underwriters against certain without notice. Neither we nor the
liabilities, including civil Underwriters can assure the
liabilities under the Securities liquidity of any trading market for
Act of 1933, or to contribute to the Notes.
payments which the Underwriters may
be required to make for those The Underwriters and their
liabilities. affiliates engage in transactions
with or perform services for us in
We must also pay the expenses the ordinary course of business.
of this offering, which are Those services include investment
expected to be $425,000. Those and commercial banking transactions
expenses will reduce the proceeds and services, including serving as
of this offering received by us. an agent and/or lender on some of
our credit agreements.
The Underwriters advise us that
they propose to offer the Notes to
the public initially at the
offering price
RECENT DEVELOPMENTS
On October 13, 1998, FINOVA primarily secured by accounts
consummated the acquisition of receivable. We seek to provide
United Credit Corporation, a New financing ranging from $100,000 to
York-based provider of commercial $1 million to small and midsize
financing to small and midsize businesses with annual sales under
businesses, and its Patriot Funding $10 million. FINOVA anticipates
Division. The addition will form a that this new division will enable
new division named FINOVA Growth us to serve a market segment of
Finance, which provides smaller, growth-oriented customers
collateral-based working capital earlier in their maturation cycle.
financing,
S-3
<PAGE>
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS purchaser. As a result, you would
The Notes will not be qualified have to rely on other available
for distribution under the Canadian remedies, including common law or
securities laws, including the U.S. law rights of action for
qualification requirements of each damages or rescission.
province where sales of Notes are
made. Any resales of Notes in All of our directors and
Canada must comply with those laws, officers, and the experts named in
or an exemption from those laws, the Prospectus and this Supplement,
which will vary depending on the as well as our or their assets, may
relevant jurisdiction. You are be located outside of Canada. As a
advised to seek legal advice prior result, you may not be able to
to any purchase or resale of the effect service of process within
Notes. Canada on us or them. It may not be
possible to satisfy a judgment
REPRESENTATIONS OF PURCHASERS against us or them in Canada or to
If you are a purchaser of Notes enforce a judgment obtained in
in Canada and you receive a Canadian courts outside of Canada.
purchase confirmation, you will be
deemed to represent to us, the NOTICE TO BRITISH COLUMBIA RESIDENTS
Underwriters and your dealer that If you are a purchaser of Notes
you are entitled under provincial and if the Securities Act (British
securities laws to purchase the Columbia) applies, we advise you
Notes without the benefit of a that you are required to file a
prospectus qualified under the report with the British Columbia
securities laws of Canada. If Securities Commission within 10
required by law, you will also days of the sale of any Notes
represent that you are purchasing acquired by you under this
the Notes as a principal and not as offering. The report must be in the
an agent. You will also represent form attached to that commission's
that you have reviewed the text Blanket Order #95/17, a copy of
above under "Resale Restrictions." which may be obtained from us or
If you are purchasing the Notes in the Underwriters. You need only
British Columbia, you will also file one report for Notes acquired
represent that you are not on the same day under the same
purchasing them as an individual. prospectus exemption.
RIGHTS OF ACTION (ONTARIO PURCHASERS) TAXATION AND ELEGIBILITY FOR INVESTMENT
The Notes are offered by a You should consult your own
foreign issuer, so the contractual legal and tax advisors about the
rights of action prescribed by consequences of investing in the
section 32 of the Regulation under Notes in your circumstances and
Securities Act (Ontario) will not whether you are eligible to buy
apply to you if you are an Ontario them under Canadian law.
S-4
<PAGE>
Prospectus FINOVA
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
THE FINOVA GROUP INC.
FINOVA CAPITAL CORPORATION
By this prospectus, we may offer up to
$2,000,000,000 of our:
DEBT SECURITIES We will provide the specific terms of
COMMON STOCK (including, for The these securities in supplements to
FINOVA Group Inc., Rights to Purchase this prospectus. You should read this
Junior Participating Preferred Stock) prospectus and the supplements
PREFERRED STOCK carefully before you invest.
DEPOSITARY SHARES
WARRANTS
FINOVA Capital Corporation is a wholly We may offer the securities directly
owned subsidiary of The FINOVA Group, or through underwriters, agents or
Inc. dealers. The supplement will describe
the terms of that plan of
distribution. "Plan of Distribution"
below also provides more information
on this topic.
These securities have not been
approved or disapproved by the SEC or
any state securities commission.
None of those authorities has
determined that this prospectus is
accurate or complete.
Any representation to the contrary is
a criminal offense.
The date of this prospectus is August 7, 1998
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
The FINOVA Group Inc. ("FINOVA * Annual Reports on Form 10-K of
Group") and FINOVA Capital Corporation FINOVA Group and FINOVA Capital
("FINOVA Capital") file annual, for the year ended December 31,
quarterly and current reports, proxy 1997.
and information statements and other
information with the SEC. You may read * Portions of the Proxy Statement
and copy any document we file at the on Schedule 14A for FINOVA
SEC's public reference rooms at 450 Group's Annual Meeting of
Fifth Street, N.W., Washington, D.C. Shareholders held on May 14,
20549. Please call the SEC at 1998 that have been incorporated
1-800-SEC-0330 for more information on by reference into our 10-K.
the public reference room and their
copy charges. Our SEC filings are also * Quarterly Reports on Form 10-Q
available to the public from the SEC's of FINOVA Group and FINOVA
web site at http://www.sec.gov, which Capital for the quarters ended
may also be available on our web site March 31 and June 30 1998.
at http://www.finova.com. You may also
inspect our SEC reports and other * Current Reports on Form 8-K of
information at the New York Stock FINOVA Group dated January 23,
Exchange, 20 Broad Street, New York, April 27, and July 28, 1998.
New York 10005.
* Current Reports on Form 8-K of
The SEC allows us to "incorporate FINOVA Capital dated January 23,
by reference" the information we file April 27, and July 30, 1998.
with them, which means we can disclose
information to you by referring you to You may request a copy of those
those documents. Information filings or any other information
incorporated by reference is part of incorporated by reference in this
this prospectus. Later information prospectus, including exhibits. You
filed with the SEC updates and may do so orally or in writing by
supersedes this prospectus. contacting us at:
We incorporate by reference the Treasurer
documents listed below and any future The FINOVA Group Inc.
filings made with the SEC under 1850 North Central Avenue
Sections 13(a), 13(c), 14 or 15(d) of P.O. Box 2209
the Securities Exchange Act of 1934 Phoenix, Arizona 85002-2209
until this offering is completed: (602) 207-6900
We will provide that information at no
charge to you.
THE COMPANIES
FINOVA Group is a financial and our ability to provide value-added
services holding company. Through our services enable us to differentiate
principal subsidiary, FINOVA Capital, ourselves from our competitors. That
we provide a broad range of financing expertise and ability also enable us
and capital market products to to command pricing that provides a
mid-size business. We concentrate on satisfactory spread over our borrowing
lending to mid-size businesses. FINOVA costs.
Capital has been in operation for over
43 years. We seek to maintain a high quality
portfolio and to minimize non-earning
We extend revolving credit assets and write-offs. We use clearly
facilities, term loans, and equipment defined underwriting criteria and
and real estate financing primarily to stringent portfolio management
"middle-market" businesses with techniques. We diversify our lending
financing needs falling generally activities geographically and among a
between $500,000 and $35 million. range of industries, customers and
loan products.
We operate in 16 specific industry
or market niches under three market Due to the diversity of our
groups. We selected those groups portfolio, we believe we are better
because our expertise in evaluating able to manage competitive changes in
the credit-worthiness of prospective our markets and to withstand the
customers impact of deteriorating economic
conditions on a regional or
2
<PAGE>
national basis. There can be no * REDISCOUNT FINANCE offers
assurance, however, that competitive revolving credit facilities to
changes, borrowers' performance, the independent consumer finance
economic conditions or other factors industry including sales,
will not result in an adverse impact automobile, mortgage and premium
on our results of operations or finance companies. Typical
financial condition. transaction sizes range from
$1 million to $35 million.
We generate interest, leasing, fee
and other income through charges SPECIALTY FINANCE
assessed on outstanding loans, loan * COMMERCIAL EQUIPMENT Finance
servicing, leasing, brokerage and offers equipment leases, loans
other activities. Our primary expenses and "turnkey" financing to a
are the costs of funding our loan and broad range of midsize
lease business, including interest companies. Specialty markets
paid on debt, provisions for credit include the corporate aircraft
losses, marketing expenses, salaries and emerging growth technology
and employee benefits, servicing and industries, primarily
other operating expenses and income biotechnology and electronics.
taxes. Typical transaction sizes range
from $500,000 to $15 million.
BUSINESS GROUPS
We operate the following principal * COMMUNICATIONS FINANCE
lines of business under three market specializes in term financing to
groups: advertising and
subscriber-supported businesses
COMMERCIAL FINANCE including radio and television
* BUSINESS CREDIT offers stations, cable operators,
collateral-oriented revolving outdoor advertising firms and
credit facilities and term loans publishers. Typical transaction
for manufacturers, distributors, sizes range from $1 million to
wholesalers and service $40 million.
companies. Typical transaction
sizes range from $500,000 to $3 * FRANCHISE FINANCE offers
million. equipment, real estate and
acquisition financing for
* COMMERCIAL SERVICES offers full operators of established
service factoring and accounts franchise concepts. Transaction
receivable management services sizes generally range from
for entrepreneurial and larger $500,000 to $15 million.
firms, primarily in the textile
and apparel industries. The * HEALTHCARE FINANCE offers a full
annual factored volume of these range of working capital,
companies is generally between equipment and real estate
$5 million and $25 million. This financing products for the U.S.
line provides accounts health care industry.
receivable and inventory Transaction sizes typically
financing and loans secured by range from $500,000 to $25
equipment and real estate. million.
* CORPORATE FINANCE provides a * PUBLIC FINANCE provides
full range of cash flow-oriented tax-exempt term financing to
and asset-based term and state and local governments,
revolving loan products for non-profit corporations and
manufacturers, wholesalers, entities using industrial
distributors, specialty revenue or development bonds.
retailers and commercial and Typical transaction sizes range
consumer service businesses. from $100,000 to $5 million.
Typical transaction sizes range
from $2 million to $35 million. * PORTFOLIO SERVICES provides
customized receivable servicing
* INVENTORY FINANCE provides and collections for time-share
inbound and outbound inventory developers and other generators
financing, combined of consumer receivables.
inventory/accounts receivable
lines of credit and purchase * RESORT FINANCE focuses on
order financing for equipment construction, acquisition and
distributors, value-added receivables financing of
resellers and dealers timeshare resorts worldwide as
nationwide. Transaction sizes well as term financing for
generally range from $500,000 to established golf resort hotels
$30 million. and receivables funding for
developers of second home
communities. Typical transaction
sizes range from $5 million to
$35 million.
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<PAGE>
* SPECIALTY REAL ESTATE FINANCE Both FINOVA Group and FINOVA
provides term financing for Capital are Delaware corporations.
hotel, anchored retail, office FINOVA Group was incorporated in 1991
and owner-occupied properties. to serve as the successor to The Dial
Typical transaction sizes range Corp's financial services businesses.
from $5 million to $25 million. Dial transferred those businesses to
FINOVA Group in March 1992 in a
* TRANSPORTATION FINANCE spin-off. Since that time, FINOVA
structures equipment loans, Group has increased its total assets
leases, acquisition financing from about $2.6 billion at December
and leveraged lease equity 31, 1992 to $8.7 billion at December
investments for commercial and 31, 1997. Income from continuing
cargo airlines worldwide, operations increased from $37 million
railroads and operators of other in 1992 to $139 million in 1997. We
transportation related believe FINOVA Group ranks among the
equipment. Typical transaction largest independent commercial finance
sizes range from $5 million to companies in the U.S., based on total
$30 million. Through FINOVA assets. The common stock of FINOVA
Aircraft Investors LLC, FINOVA Group is traded on the New York Stock
also seeks to use its market Exchange.
expertise and industry presence
to purchase, upgrade and resell FINOVA Capital was incorporated in
used commercial aircraft. 1965 and is the successor to a
California corporation that was formed
CAPITAL MARKETS in 1954. All of FINOVA Capital's
* FINOVA REALTY CAPITAL capital stock is owned by FINOVA
specializes in providing capital Group.
markets-funded commercial real
estate financing products and Our principal executive offices are
commercial mortgage banking located at 1850 North Central Avenue,
services. Typical transaction P.O. Box 2209, Phoenix, Arizona
sizes range from $1 million to 85002-2209. Our telephone number is
$5 million. (602) 207-6900.
* FINOVA INVESTMENT ALLIANCE
provides equity and debt
financing for midsize businesses
in partnership with
institutional investors and
selected fund sponsors. Typical
transaction sizes range from $2
million to $15 million.
4
<PAGE>
SELECTED FINANCIAL INFORMATION
The following information was Management's Discussion and
derived from FINOVA Group's financial Analysis. Those items are part of our
statements. The information is only a Annual Reports on Form 10-K. You
summary and does not provide all of should read our financial statements
the information contained in our and other information that we have
financial statements, including the filed with the SEC.
related notes, and
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
--------------------------- ---------------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Interest earned from
financing transactions $ 486,023 $ 429,197 $ 897,991 $ 769,346 $ 680,912 $ 463,404 $ 255,216
Interest margins earned 222,799 196,083 408,909 340,517 287,880 216,667 124,847
Volume-based fee income 41,259 16,367 46,733 28,588 21,204 10,796 0
Provision for credit losses 25,500 26,300 69,200 41,751 37,568 10,439 5,706
Gains on sale of assets 10,805 13,701 30,261 12,949 10,889 3,877 5,439
Income from continuing
operations 80,112 65,409 139,098 116,493 93,798 73,770 37,846
Net income 80,112 65,409 139,098 117,000 97,629 74,313 37,347
Basic earnings per
share for continuing
operations $ 1.43 $ 1.21 $ 2.56 $ 2.14 $ 1.72 $ 1.48 $ 0.96
Basic earnings per share $ 1.43 $ 1.21 $ 2.56 $ 2.15 $ 1.79 $ 1.49 $ 0.95
Basic adjusted weighted
average outstanding
shares 56,189,000 53,965,000 54,405,000 54,508,000 54,633,000 49,765,000 39,277,000
Diluted earnings per
share for continuing
operations $ 1.34 $ 1.15 $ 2.42 $ 2.08 $ 1.69 $ 1.46 $ 0.90
Diluted earnings per share $ 1.34 $ 1.15 $ 2.42 $ 2.09 $ 1.76 $ 1.47 $ 0.89
Diluted adjusted weighted
average shares 61,092,000 58,598,000 59,161,000 56,051,000 55,469,000 50,436,000 40,552,000
Dividend declared per
common share $ 0.28 $ 0.24 $ 0.52 $ 0.46 $ 0.42 $ 0.37 $ 0.34
FINANCIAL POSITION:
Investment in financing
transactions 8,928,644 7,826,196 8,399,456 7,298,759 6,348,079 5,342,979 2,846,571
Nonaccruing assets 196,824 165,885 187,356 155,505 143,127 149,046 102,607
Reserve for credit losses 178,070 159,747 177,088 148,693 129,077 110,903 64,280
Total assets 9,288,864 8,060,403 8,719,840 7,526,734 7,036,514 5,821,343 2,834,322
Total debt 7,345,194 6,338,122 6,764,581 5,850,223 5,649,368 4,573,354 2,079,286
Company-obligated
mandatory redeemable
convertible preferred
securities of subsidiary
trust solely holding con-
vertible debentures of
FINOVA Group
("TOPrS") 111,550 111,550 111,550 111,550 -- -- --
Shareowners' equity 1,152,097 948,595 1,090,454 929,591 825,184 770,252 503,300
</TABLE>
RATIO OF INCOME TO TOTAL FIXED CHARGES
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- ---------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
FINOVA Group 1.59x 1.54x 1.54x 1.50x 1.44x 1.58x 1.53x
FINOVA Capital 1.59x 1.54x 1.54x 1.50x 1.44x 1.58x 1.50x
RATIO OF INCOME TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------- ---------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
FINOVA Group 1.57x 1.51x 1.52x 1.50x 1.44x 1.58x 1.50x
FINOVA Capital 1.59x 1.54x 1.54x 1.50x 1.44x 1.58x 1.46x
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<PAGE>
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. Income available for representative of interest.
fixed charges, for purposes of
computing the above ratios, consists
of income from
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this * Actions of our competitors and
prospectus and any supplements are our ability to respond to those
"forward-looking," in that they do not actions. We seek to remain
discuss historical fact but instead competitive without sacrificing
note future expectations, projections, prudent lending standards. Doing
intentions or other items relating to business under those standards
the future. These forward-looking becomes more difficult, however,
statements include those made in when competitors offer financing
documents incorporated in this with less stringent criteria. We
prospectus by reference. seek to maintain credit quality
at the risk of growth in assets,
Forward-looking statements are if necessary.
subject to known and unknown risks,
uncertainties and other factors that * The cost of our capital. That
may cause our actual results or cost depends on many factors,
performance to differ materially from some of which are beyond our
those contemplated by the control, such as our portfolio
forward-looking statements. Many of quality, ratings, prospects and
those factors are noted in conjunction outlook.
with the forward-looking HERE IT
ISstatements. Many of those factors * Changes in government
are noted in conjunction with the regulations, tax rates and
forward-looking statements in the similar matters. For example,
text. Other important factors that government regulations could
could cause actual results to differ significantly increase the cost
include: of doing business or could
eliminate certain tax advantages
* The results of our efforts to of some of our financing
implement our business strategy. products.
Failure to fully implement our
business strategy might result * Other risks detailed in our
in decreased market penetration, other SEC reports or filings.
adverse effects on results of
operations and other adverse We do not promise to update
results. forward-looking information to reflect
actual results or changes in
* The effect of economic assumptions or other factors that
conditions and the performance could affect those statements.
of our borrowers. Economic
conditions in general or in
particular market segments could
impact the ability of our
borrowers to operate or expand
their businesses, which might
result in decreased performance
for repayment of their
obligations or reduce demand for
additional financing needs.
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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<PAGE>
DESCRIPTION OF DEBT SECURITIES
DEBT SECURITIES * FINOVA Capital may discharge the
The following summary applies only debt issued in any series at any
to the debt securities of FINOVA time by depositing sufficient
Capital. If we issue debt securities funds with the Trustee to pay
of FINOVA Group, we will describe the obligations when due. All
those securities and the indenture amounts due to you on the debt
under which they are issued in the would be paid by the Trustee
applicable supplement. from the deposited funds.
The debt securities of FINOVA * If FINOVA Capital fails to meet
Capital will be issued under an its obligations on the debt, it
indenture (the "Indenture") between will be in default. Defaults for
FINOVA Capital and one or more U.S. senior debt securities are
banking institutions (a "Trustee"). described on pages 11-12 of this
The Indenture may but need not have pospectus.
separate Trustees for senior and
subordinated debt. GENERAL
The debt securities of FINOVA Group
The following summary of certain and FINOVA Capital offered by this
provisions of the Indenture is not prospectus will be limited to $2.0
complete. You should look at the billion principal amount. The
Indenture that is filed as an exhibit Indenture does not limit the amount of
to the Registration Statement. To debt securities FINOVA Capital could
obtain a copy of the Indenture, see offer under it. FINOVA Capital can
"Where You Can Find More Information" issue debt securities in one or more
on page 2. series, in each case as authorized by
us from time to time. Each series may
All capitalized terms have the differ as to its terms. The debt
meanings specified in the Indenture. securities will be FINOVA Capital's
unsecured general obligations and may
GENERAL INDENTURE PROVISIONS THAT or may not be subordinated to FINOVA
APPLY TO SENIOR AND SUBORDINATED DEBT Capital's other general indebtedness.
* The Indenture does not limit the Those that are not subordinated are
amount of debt that FINOVA called "senior debt securities." The
Capital may issue nor provide others are "subordinated debt
holders any protection should securities."
there be a highly leveraged
transaction involving our The supplement will address the
company. We may issue additional following terms of the debt
debt securities without your securities:
consent.
* Their title.
* If FINOVA Capital redeems debt
which is convertible into its * Any limits on the principal
capital stock or other amounts to be issued.
securities, your right to
convert that debt into capital * The dates on which the principal
stock or other securities will is payable.
expire on the redemption date.
* The rates (which may be fixed or
* The Indenture allows FINOVA variable) at which they shall
Capital to merge or to bear interest, or the method for
consolidate with another determining rates.
company, or sell all or
substantially all of its assets * The dates from which the
to another company. If these interest will accrue and will be
events occur, the other company payable, or the method of
will be required to assume determining those dates, and any
FINOVA Capital's record dates for the payments
responsibilities on the debt, due.
and FINOVA Capital will be
released from all liabilities * Any provisions for redemption,
and obligations. conversion or exchange, at our
option or otherwise, including
* The Indenture provides that the periods, prices and terms of
holders of a majority of the redemption or conversion.
total principal amount of the
debt outstanding in any series * Any sinking fund or similar
may vote to change our provisions, whether mandatory or
obligations or your rights at the holder's option,
concerning that series of debt.
But to change the payment of
principal or interest, every
holder in that series must
consent.
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along with the periods, prices Ownership of the Global Securities;
and terms of redemption, Beneficial Ownership. So long as the
purchase or repayment. depositary or its nominee is the
registered owner of a global security,
* The amount or percentage payable that entity will be the sole holder of
if we accelerate their maturity, the debt securities represented by
if other than the principal that instrument. The Trustee and we
amount. are only required to treat the
depositary or its nominee as the legal
* Any changes to the events of owner of those securities for all
default or covenants set forth purposes under the Indenture.
in the Indenture.
Each actual purchaser of debt
* The terms of subordination, if securities represented by a global
any. security (a "beneficial owner") will
not be entitled to receive physical
* Whether the series can be delivery of certificated securities,
reopened. will not be considered the holder of
those securities for any purpose under
* Any other terms consistent with the Indenture, and will not be able to
the Indenture. transfer or exchange the global
securities, unless this prospectus or
We may authorize and determine the the supplement provide to the
terms of a series of debt securities contrary. As a result, each beneficial
by resolution of our board of owner must rely on the procedures of
directors or one of its committees or the depositary to exercise any rights
through a supplemental Indenture. of a holder under the Indenture. In
addition, if the beneficial owner is
FORM OF DEBT SECURITIES not a direct or indirect participant
The debt securities will be issued in the depositary (each a
in registered form. Unless the "participant") the beneficial owner
supplement otherwise provides, debt must rely on the procedures of the
securities will be issued as one or participant through which it owns its
more global securities. This means beneficial interest in the global
that we will not issue certificates to security.
each holder. We generally will issue
global securities in the total The laws of some jurisdictions
principal amount of the debt require that certain purchasers of
securities distributed in that series. securities take physical delivery of
We will issue debt securities only in the securities in certificated form.
denominations of $1,000 or integral Those laws and the above conditions
multiples of that amount, unless the may impair the ability to transfer
supplement states otherwise. beneficial interests in the global
securities.
GLOBAL SECURITIES
In General. Debt securities in THE DEPOSITORY TRUST COMPANY
global form will be deposited with or The following is based on
on behalf of a depositary. Global information furnished by DTC and
securities are represented by one or applies to the extent it is the
more global certificates for the depositary, unless otherwise stated in
series registered in the name of the a supplement:
depositary or its nominee. Debt
securities in global form may not be REGISTERED OWNER. The debt
transferred except as a whole among securities will be issued as fully
the depositary, a nominee of or a registered securities in the name of
successor to the depositary and any Cede & Co. (DTC's partnership
nominee of that successor. Unless nominee). One fully registered global
otherwise identified in the security generally will be issued for
supplement, the depositary will be The each $200 million principal amount of
Depository Trust Company ("DTC"). debt securities. The Trustee will
deposit the global securities with the
NO DEPOSITARY OR GLOBAL SECURITIES. depositary. The deposit of the global
If a depositary for a series is securities with DTC and its
unwilling or unable to continue as registration in the name of Cede & Co.
depositary, and a successor is not will not change the beneficial
appointed by us within 90 days, we ownership of the securities.
will issue debt securities of that
series in definitive form in exchange DTC ORGANIZATION. DTC is a
for the global security or securities limited-purpose trust company
of that series. We also may determine organized under the New York Banking
at any time in our discretion not to Law, a "banking organization" within
use global securities for any series. the meaning of that law, a member of
In that event, we will issue debt the Federal Reserve System, a
securities in definitive form. "clearing corporation" within
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the meaning of the New York Uniform NOTICES AMONG THE DEPOSITARY,
Commercial Code and a "clearing PARTICIPANTS AND BENEFICIAL OWNERS.
agency" registered under the Notices and other communications by
provisions of Section 17A of the the depositary, its participants and
Securities Exchange Act of 1934, as the beneficial owners will be governed
amended. by arrangements among them, subject to
any legal requirements in effect.
DTC is owned by a number of its
direct participants and by the New VOTING PROCEDURES. Neither DTC nor
York Stock Exchange, Inc., the Cede & Co. will give consents for or
American Stock Exchange, Inc. and the vote the global securities. The
National Association of Securities depositary generally mails an omnibus
Dealers, Inc. Direct participants proxy to us just after the applicable
include securities brokers and record date. That proxy assigns Cede &
dealers, banks, trust companies, Co.'s consenting or voting rights to
clearing corporations and certain the direct participants to whose
other organizations who directly accounts the securities are credited
participate in DTC (each a "direct at that time.
participant"). Other entities
("indirect participants") may access 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 participants, to credit direct participants'
either directly or indirectly. The accounts on the applicable payment
rules applicable to DTC and its date unless it has reason to believe
participants are on file with the SEC. it will not receive payment on that
date. Payments by participants to
DTC ACTIVITIES. DTC holds beneficial owners will be governed by
securities that its participants standing instructions and customary
deposit with it. DTC also facilitates practices, as is the case with
the settlement among participants of securities held for customers in
securities transactions, such as bearer form or registered in "street
transfers and pledges, in deposited name." Those payments will be the
securities through electronic responsibility of that participant,
computerized book-entry changes in not the depositary, the Trustee or us,
participant's accounts. Doing so subject to any legal requirements in
eliminates the need for physical effect at that time.
movement of securities certificates.
We are responsible for payment of
PARTICIPANTS' RECORDS. Except as principal, interest and premium, if
otherwise provided in this prospectus any, to the Trustee, who is
or a supplement, purchases of the debt responsible to pay it to the
securities must be made by or through depositary. The depositary is
direct participants, which will responsible for disbursing those
receive a credit for the securities on payments to direct participants. The
the depositary's records. The participants are responsible for
beneficial owner's ownership interest disbursing payments to the beneficial
is in turn to be recorded on the owners.
direct and indirect participants'
records. Beneficial owners will not TRANSFER OR EXCHANGE OF SECURITIES
receive written confirmations from the You may transfer or exchange the
depositary of their purchase, but they debt securities (other than a global
are expected to receive them, along security) without service charge at
with periodic statements of their our office designated for that purpose
holdings, from the direct or indirect or at the office of any transfer agent
participants through whom they entered or security registrar identified under
into the transaction. the Indenture. You must execute a
proper form of transfer and pay any
Transfers of interests in the taxes and other governmental charges
global securities will be made on the resulting from that action. You may
books of the participants on behalf of transfer or exchange the debt
the beneficial owners. Certificates securities (other than a global
representing the interest of the security) initially at our offices at
beneficial owners in the securities 1850 North Central Avenue, P.O. Box
will not be issued unless the use of 2209, Phoenix, Arizona 85002-2209 or
global securities is suspended, as at our office or agency established
provided above. for that purpose in New York, New
York.
The depositary has no knowledge of
the actual beneficial owners of the Debt securities in the several
global securities. Its records only denominations will be interchangeable
reflect the identity of the direct without service charge, but we may
participants as owners of the require payment to cover taxes and
securities. Those participants may or other
may not be the beneficial owners.
Participants are responsible for
keeping account of their holdings on
behalf of their customers.
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governmental charges. The Trustee the consolidated balance sheet of
initially will act as authenticating FINOVA Capital and its consolidated
agent under the Indenture. subsidiaries.
SAME-DAY SETTLEMENT AND PAYMENT "LIEN" means any lien, charge,
Unless the supplement otherwise claim, security interest, pledge,
provides, the debt securities will be hypothecation, right of another under
settled in immediately available any conditional sale or other title
funds. We will make payments of retention agreement or any other
principal and interest in immediately encumbrance affecting title to
available funds. property. Lien includes any lease
under a sale and leaseback
PAYMENT AND PAYING AGENT arrangement.
If the debt securities are not held
in global form, we will make payment "SUBSIDIARY" means any corporation
of principal and premium, if any, a majority of the Voting Stock of
against surrender of the debt which is owned, directly or
securities at the principal office of indirectly, by FINOVA Capital or by
the Trustee in New York, New York. We one or more Subsidiaries or by FINOVA
will pay any installment of interest Capital and one or more Subsidiaries.
on debt securities to the record
holder on the record date for that "RESTRICTED SUBSIDIARY" is any
interest. We can make those payments Subsidiary a majority of the Voting
through the Trustee, as noted above, Stock of which is owned directly by
by check mailed by first class mail to FINOVA Capital or by one or more
the registered holders at their Restricted Subsidiaries, or by FINOVA
registered address or by wire transfer Capital and one or more Restricted
to an eligible account of the Subsidiaries and which is designated
registered holder. as a Restricted Subsidiary by
resolution of FINOVA Capital's board
If any payments of principal, of directors.
premium or interest are not claimed
within three years of the date the "UNRESTRICTED SUBSIDIARY" means any
payment became due, those funds are to Subsidiary other than a Restricted
be repaid to us. The beneficial owners Subsidiary.
of those interests thereafter will
look only to us for payment for those "VOTING STOCK" means stock of any
amounts. class or classes (however designated)
having ordinary voting power for the
CERTAIN INDENTURE PROVISIONS election of a majority of the members
Certain Definitions. The following of the board of directors (or any
is a summary of certain terms defined governing body) of that corporation,
in the Indenture and applicable only other than stock having that power
to senior debt securities. Those terms only by reason of the happening of a
are determined in accordance with contingency.
generally accepted accounting
principles, unless specifically stated LIMITATION ON LIENS. The Indenture
otherwise. provides that FINOVA Capital will not
create, assume, incur or allow to be
"CONSOLIDATED NET TANGIBLE ASSETS" created, assumed or incurred or to
means the total of all assets exist any Lien on any of its
reflected on the most recent quarterly properties unless FINOVA Capital
or annual consolidated balance sheet secures the senior debt securities
of FINOVA Capital and its consolidated equally and ratably with any other
subsidiaries, at their net book values obligation secured in that manner. The
(after deducting related depreciation, Indenture contains the following
depletion, amortization and all other exceptions to that prohibition:
valuation reserves), less the
aggregate of its current liabilities * Leases of property in the
and those of its consolidated ordinary course of business or
Subsidiaries reflected on that balance if the property is not needed in
sheet. We exclude from assets the operation of our business.
goodwill, unamortized debt discount
and all other like intangible assets. * Purchase money security
For purposes of this definition, interests that are non-recourse
"current liabilities" include all to FINOVA Capital or its
indebtedness for money borrowed, Restricted Subsidiaries except
incurred, issued, assumed or to the extent of the property so
guaranteed by FINOVA Capital and its acquired or any proceeds from
consolidated subsidiaries, and other that property, or both.
payables and accruals, in each case
payable on demand or due within one * Governmental deposits or
year of the date of determination, but security as a condition to the
exclude any portion of long-term debt transaction of business or the
maturing within one year of that date
of determination, all as reflected on
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exercise of a privilege, or to MERGER, CONSOLIDATION AND SALE OF
maintain self-insurance, or to ASSETS. FINOVA Capital cannot merge
participate in any fund in with or into, consolidate with, sell
connection with worker's or lease all or substantially all of
compensation, unemployment its assets to or purchase all or
insurance, pensions, social substantially all the assets of
security or for appeal bonds. another corporation unless it will be
the surviving corporation or the
* Liens for taxes or assessments successor is incorporated in the U.S.
not yet due or which are payable and assumes all of FINOVA Capital's
without a penalty or are being obligations under the debt securities
contested in good faith and with and the Indenture, provided, and if
adequate reserves, so long as immediately after that transaction, no
foreclosure or similar default will exist. A purchase by a
proceedings are not commenced. Subsidiary of all or substantially all
of the assets of another corporation
* Judgment Liens that have not will not be a purchase of those assets
remained undischarged or by FINOVA Capital. If, however, any of
unstayed for more than six the transactions noted in this
months. paragraph occurs and results in a Lien
on any of FINOVA Capital's properties
* Incidental or undetermined (except as permitted above), FINOVA
construction, mechanics or Capital must simultaneously secure the
similar Liens arising in the senior debt securities equally and
ordinary course of business ratably with the debt secured by that
relating to obligations not Lien.
overdue or which are being
contested by FINOVA Capital or a MODIFICATION OF THE INDENTURE. The
Restricted Subsidiary in good Trustee and FINOVA Capital may amend
faith and deposits for releases the Indenture without consent of the
of such Liens. holders of debt securities to do
certain things, such as establishing
* Zoning restrictions, licenses, the form and terms of any series of
easements and similar debt securities. FINOVA Capital must
encumbrances or defects if obtain consent of holders of at least
immaterial. two-thirds of the outstanding debt
securities affected by a change to
* Other Liens immaterial in the amend the terms of the Indenture or
aggregate incidental to FINOVA any supplemental indenture or the
Capital's or the Restricted rights of the holders of those debt
Subsidiary's business or securities.
property, other than for
indebtedness. Unanimous consent is required for
changes to extend the fixed maturity
* Banker's liens and set off of any debt securities, reduce the
rights in the ordinary course of principal, redemption premium or rate
business. of interest, extend the time of
payment of interest, change the form
* Leasehold or purchase rights, of currency, limit the right to sue
exercisable for fair for payment on or after maturity of
consideration, arising in the the debt securities, adversely affect
ordinary course of business. the right, if any, to convert or
exchange the debt securities or
* Liens on property or securities adversely affect the subordination
existing when an entity becomes provisions, if any. Unanimous consent
a Restricted Subsidiary or is also required to reduce the level
merges with FINOVA Capital or a of consents needed to approve any such
Restricted Subsidiary, provided change. The Trustee must consent to
they are not incurred in changes modifying its rights, duties
anticipation of those events. or immunities.
* Liens on property or securities DEFAULTS. Events of default under
existing at the time of the Indenture for any series are:
acquisition.
* Failure for 30 days to pay
* Liens in a total amount less interest on any debt securities
than $25 million, excluding of that series.
Liens covered by the exceptions
noted above. * Failure to pay principal (other
than sinking fund redemptions)
* Liens securing indebtedness of or premium, if any, on debt
FINOVA Capital or a Restricted securities of that series.
Subsidiary provided those and
similar Liens on indebtedness do * Failure for 30 days to pay any
not exceed 10% of Consolidated sinking fund installment on that
Net Tangible Assets, excluding series.
certain preexisting indebtedness
and those Liens permitted above.
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* Violation of a covenant under under that series before maturity. It
the Indenture pertaining to that may do so by depositing with the
series that persists for at Trustee, in trust for the benefit of
least 90 days after FINOVA the holders, either enough funds to
Capital is notified by the pay, or direct U.S. government
Trustee or the holders of 25% of obligations that, together with the
the series. income of those obligations (without
considering any reinvestment), will be
* Default in other instruments or sufficient to pay, the obligation of
under any other series of debt that series, including principal,
securities resulting in premium, if any, and interest. Certain
acceleration of indebtedness other conditions must be met before it
over $15 million, unless that may do so. FINOVA Capital must deliver
default is rescinded or an opinion of counsel that the holders
discharged within 10 days after of that series will have no Federal
written notice by the Trustee or income tax consequences as a result of
the holders of 10% of that that deposit.
series.
SUBORDINATION
* Bankruptcy, insolvency or The terms and conditions of any
similar event. subordination of subordinated debt
securities to other indebtedness of
* Any other event of default with FINOVA Capital will be described in
respect to the debt securities the supplement relating to the
of that series. subordinated debt securities. The
terms will include a description of
If an event of default occurs and the indebtedness ranking senior to the
continues, the Trustee or the holders subordinated debt securities, the
of at least 25% of the series may restrictions on payments to the
declare those debt securities due and holders of the subordinated debt
payable. FINOVA Capital is required to securities while a default exists with
certify to the Trustee annually as to respect to senior indebtedness, any
its compliance with the Indenture. A restrictions on payments to the
default under one series does not holders of the subordinated debt
necessarily mean that a default or an securities following an event of
event of default will have occurred default and provisions requiring
under another series under the holders of the subordinated debt
Indenture. securities to remit certain payments
to holders of senior indebtedness.
Holders of a majority of the
principal of a series may control Because of the subordination, if
certain actions of the Trustee and may FINOVA Capital becomes insolvent,
waive past defaults for that series. holders of the subordinated debt
Except as provided in the Indenture, securities may recover less, ratably,
the Trustee will not be under any than other creditors of FINOVA
obligation to exercise any of the Capital, including holders of senior
rights or powers vested in it by the indebtedness.
Indenture at the request, order or
direction of any holder unless one or CONVERSION
more of them shall have offered Debt securities may be convertible
reasonable indemnity to the Trustee. into or exchangeable for common stock,
preferred stock, other debt
If an event of default occurs and securities, warrants or other of
is continuing, the Trustee may securities of FINOVA Capital, or
reimburse itself for its reasonable securities of any other issuer or
compensation and expenses incurred out obligor. The supplement will describe
of any sums held or received by it the terms of any conversion rights.
before making any payments to the
holders of the debt securities of the CONCERNING THE TRUSTEE
defaulted series. The Trustee may, but need not be,
one of the banks in one of FINOVA
The right of any holders of debt Capital's credit agreements and from
securities of a series to commence an time to time may perform other
action for any remedy is subject to banking, trust or related services on
certain conditions, including the behalf of FINOVA Capital or our
requirement that the holders of at customers.
least 25% of that series request that
the Trustee take such action, and
offer reasonable indemnity to the
Trustee against its liabilities
incurred in doing so.
DEFEASANCE
FINOVA Capital may defease the debt
securities of a series, meaning it
would satisfy its duties
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DESCRIPTION OF CAPITAL STOCK
The following summary of certain action, to issue preferred stock in
provisions of the common stock, the one or more series, with the
preferred stock, the junior designations, powers, preferences,
participating preferred stock (the rights, qualifications, limitations
"Junior Preferred Stock") and the and restrictions as the board
rights to purchase the Junior determines. Thus, the board, without
Preferred Stock (the "Rights") of stockholder approval, could authorize
FINOVA Group is not complete. You the issuance of preferred stock with
should refer to the certificate of voting, conversion and other rights
incorporation and bylaws of FINOVA that could adversely affect the voting
Group, as amended, FINOVA Group's power and other rights of the holders
certificate of designations for the of the common stock or that could make
Junior Preferred Stock and the Rights it more difficult for another company
Agreement dated as of February 15, to enter into certain business
1992, as amended and restated as of combinations with FINOVA Group. See
September 14, 1995 (the "Rights "-- Certain Other Provisions of the
Agreement"), between FINOVA Group and Certificate of Incorporation, the
Harris Trust & Savings Bank, as Bylaws and Delaware Law -- Preferred
successor Rights Agent. To obtain Stock" below.
copies of those documents, see "Where
You Can Find More Information" on page SHAREHOLDER RIGHTS PLAN
2. If we issue capital stock of FINOVA In 1992, FINOVA Group issued one
Capital, we will describe those Right for each outstanding share of
securities in the applicable common stock. FINOVA Group has and
supplement. will continue to issue one Right with
each newly issued share of its common
FINOVA Group is authorized by its stock (including stock issued on
certificate of incorporation to issue conversion of preferred securities).
105,000,000 shares of capital stock, The obligation to continue to issue
consisting of 5,000,000 shares of the Rights, however, will terminate on
preferred stock, par value $.01 per the expiration, exchange or redemption
share, and 100,000,000 shares of of the Rights.
common stock, par value $.01 per
share. As of July 31, 1998, there were Each Right entitles the registered
56,491,446 shares of common stock holder to purchase from FINOVA Group
outstanding (excluding 2,063,229 1/200th of a share of the Junior
treasury shares held by FINOVA Group) Preferred Stock. The purchase price is
and no shares of preferred stock $67.50 per 1/200th of a share, subject
outstanding. However, FINOVA Group has to adjustment under certain
authorized 600,000 shares of Junior circumstances.
Preferred Stock which have been
reserved for issuance on the exercise The Rights will trade only with the
of the Rights. common stock and FINOVA Group will not
issue separate certificates for the
COMMON STOCK Rights until the "Rights Distribution
The holders of the common stock are Date." That date occurs on the first
entitled to one vote per share. FINOVA to occur of the following events:
Group's certificate of incorporation
does not provide for cumulative voting * 10 days after a public
in the election of directors. The announcement (the "Share
board may declare dividends on the Acquisition Date") that a person
common stock in its discretion, if or group of persons acting
funds are legally available for those together has become the
purposes. On liquidation, common beneficial owner of at least 20%
stockholders are entitled to receive or more of FINOVA Group's common
pro rata any remaining assets of stock, directly or indirectly
FINOVA Group, after we satisfy or (becoming an "Acquiring
provide for the satisfaction of all Person"), or
liabilities as well as obligations on
our preferred stock, if any. The * 10 business days after the start
holders of common stock do not have or announcement of an intention
preemptive rights to subscribe for or to make a tender offer or
purchase any shares of capital stock exchange offer that would result
or other securities of FINOVA Group. in a person or group acting
together beneficially owning 20%
PREFERRED STOCK or more of FINOVA Group's common
Under FINOVA Group's certificate of stock, directly or indirectly.
incorporation, the board is The board, however, may extend
authorized, without stockholder that 10 business day deadline
prior to the time the person or
group becomes an Acquiring
Person.
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The Rights may not be exercised We may pay the redemption price in
until the Rights Distribution Date. cash, common stock or any other method
The Rights will expire on February 28, selected by the board. Upon
2002 unless we extend that date or, redemption, the right to exercise the
unless we redeem or exchange the Rights will terminate and the holders
Rights before then. will only have the right to receive
the redemption price.
The value of each 1/200th interest
in a share of Junior Preferred Stock NO RIGHTS AS A STOCKHOLDER. Rights
is intended to approximate the value holders, as Rights holders, have no
of one share of FINOVA Group common independent rights as stockholders of
stock, due to the dividend, FINOVA Group, including the right to
liquidation and voting rights of the vote or to receive dividends, until
Junior Preferred Stock, although there the Rights are exercised.
can be no assurance the value will be
the same. ANTITAKEOVER EFFECTS. The Rights
have certain antitakeover effects. The
HOW THE RIGHTS WORK. If a person or Rights will substantially dilute the
group becomes an Acquiring Person, ownership interest in our shares of
their Rights become void. The other any Acquiring Person. That dilution
Rights holders will have the right to would impair the ability of the
exercise their Rights, at the then Acquiring Person to change the
current exercise price, for FINOVA composition of our board. It also
Group common stock having a market would impact its ability to acquire
value of two times the exercise price FINOVA Group on terms not approved by
of the Right. That right to purchase, our board, including through a tender
however, will not exist if the Rights offer at a premium to the market
Distribution Date is due to a tender price, other than through an offer
or exchange offer for all of FINOVA conditioned on a substantial number of
Group's common stock and the Rights being acquired. The Rights
independent members of our board should not interfere with any merger
determine that the offer is at a fair or business combination approved by
price, on fair terms and is otherwise the board, since we may redeem the
in the best interests of FINOVA Group Rights before they become exercisable.
and its stockholders.
JUNIOR PREFERRED STOCK NOT
The other Rights holders also will REGISTERED. The Junior Preferred Stock
have the same exercise rights is not registered with the SEC or any
described above if, after a person or other securities administrator. If the
group becomes an Acquiring Person, Rights become exercisable, we intend
FINOVA Group is acquired in a merger to register with the SEC the Junior
or business combination or at least Preferred Stock exchangeable for the
half of our total assets and earning Rights.
power are sold. The exception is the
same as the one noted in the above CERTAIN OTHER PROVISIONS OF THE
paragraph, provided that the price CERTIFICATE OF INCORPORATION, THE
offered to the shareholders for each BYLAWS AND DELAWARE LAW
share of common stock is not less than FINOVA Group's certificate of
that paid in the tender or exchange incorporation and bylaws contain
offer, and the consideration is in the certain provisions that could make
same form as that paid in the tender more difficult our acquisition by
or exchange offer. If the requirements means of a tender offer, a proxy
of this exception are met, then the contest or otherwise. This description
Rights will expire. is only a summary and does not provide
all the information contained in
EXCHANGE OF RIGHTS. After a person FINOVA Group's certificate of
or group becomes an Acquiring Person incorporation and bylaws. To obtain
but before the Acquiring Person copies of these documents, see "Where
acquires at least half of the You Can Find More Information" on page
outstanding common stock, our board 2.
may exchange all or some of the Rights
at an exchange ratio of one share of Delaware law permits a corporation
common stock for 1/200th of a share of to eliminate or limit the personal
Junior Preferred Stock per Right, liability of its directors to the
subject to adjustment. corporation or to any of its
stockholders for monetary damages for
REDEMPTION OF RIGHTS. We may redeem a breach of fiduciary duty as a
all the Rights, but not some of them, director, except (i) for breach of the
for $.005 per Right at any time before director's duty of loyalty, (ii) for
the earlier of 15 days after the Share acts or omissions not in good faith or
Acquisition Date or the expiration which involve intentional misconduct
date noted above. The board may or a knowing violation of law, (iii)
determine the conditions, terms and for certain unlawful
effective date for the redemption.
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<PAGE>
dividends and stock purchases and NUMBER OF DIRECTORS; REMOVAL;
redemptions or (iv) for any FILLING VACANCIES. FINOVA Group's
transaction from which the director certificate of incorporation provides
derived an improper personal benefit. that, subject to any rights of
FINOVA Group's certificate of preferred stockholders to elect
incorporation provides that no additional directors under specified
director will be personally liable to circumstances, the number of directors
FINOVA Group or its stockholders for will be fixed in the manner provided
monetary damages for any breach of his in the bylaws. FINOVA Group's bylaws
or her fiduciary duty as a director, provide that, subject to any rights of
except as provided by Delaware law. holders of preferred stock to elect
directors under specified
BOARD OF DIRECTORS. FINOVA Group's circumstances, the number of directors
certificate of incorporation and will be fixed from time to time
bylaws divide the board into three exclusively by directors constituting
classes of directors, with the classes a majority of the total number of
to be as nearly equal in number as directors that FINOVA Group would have
possible. The stockholders elect one if there were no vacancies on the
class of directors each year for a board, but must consist of between 3
three-year term. and 17 directors.
The classification of directors In addition, FINOVA Group's bylaws
makes it more difficult for provide that, subject to any rights of
stockholders to change the composition preferred stockholders, and unless the
of the board. At least two annual board otherwise determines, any
meetings of stockholders, instead of vacancies will be filled only by the
one, generally will be required to affirmative vote of a majority of the
change a majority of the board. That remaining directors, though less than
delay may help ensure that FINOVA a quorum. Accordingly, absent an
Group's directors, if confronted by a amendment to the bylaws, the board
proxy contest, tender or exchange could prevent any stockholder from
offer or extraordinary corporate enlarging the board and filling the
transaction, would have sufficient new directorships with that
time to review the proposal as well as stockholder's own nominees.
any available alternatives to the
proposal and to act in what they Under Delaware law, unless
believe to be the best interest of the otherwise provided in the certificate
stockholders. The classification of incorporation, directors serving on
provisions apply to every election of a classified board may only be removed
directors, regardless of whether a by the stockholders for cause. In
change in the composition of the board addition, FINOVA Group's certificate
would be beneficial to FINOVA Group of incorporation and bylaws provide
and its stockholders and whether or that directors may be removed only for
not a majority of the stockholders cause and only upon the affirmative
believe that such a change is vote of holders of at least 80% of the
desirable. voting power of all the then
outstanding shares of stock entitled
The classification provisions also to vote generally in the election of
could discourage a third party from directors, voting together as a single
initiating a proxy contest, tender class.
offer or other attempt to obtain
control of FINOVA Group, even though STOCKHOLDER ACTION BY WRITTEN
an attempt might be beneficial to CONSENT; SPECIAL MEETINGS.
FINOVA Group and its stockholders. The Stockholders of FINOVA Group must act
classification of the board thus only through an annual or special
increases the likelihood that meeting. Stockholders cannot act by
incumbent directors will retain their written consent in lieu of a meeting.
positions. In addition, because the Only the Chairman or a majority of the
classification provisions may whole board of FINOVA Group may call a
discourage accumulations of large special meeting. Stockholders of
blocks of FINOVA Group's stock by FINOVA Group are not able to call a
purchasers whose objective is to take special meeting to require that the
control of FINOVA Group and remove a board do so. At a special meeting,
majority of the board, the stockholders may consider only the
classification of the board could business specified in the notice of
reduce the likelihood of fluctuations meeting given by FINOVA Group.
in the market price of the common Preferred stockholders may be given
stock that might result from different rights from those noted
accumulations of large blocks. above.
Accordingly, stockholders could be
deprived of certain opportunities to The provisions of FINOVA Group's
sell their shares of common stock at a certificate of incorporation and
higher market price than otherwise bylaws prohibiting stockholder action
might be the case. by written consent may have the effect
of
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delaying consideration of a receipt by our Secretary between the
stockholder proposal until the next 90th day before the meeting and the
annual meeting, unless a special later of the 70th day before the
meeting is called by the Chairman or meeting or the 10th day after the
at the request of a majority of the first public announcement of the
whole board. These provisions also meeting date.
would prevent the holders of a
majority of stock from unilaterally A stockholder's notice proposing to
using the written consent procedure to nominate a person for election as a
take stockholder action. Moreover, a director must contain certain
stockholder could not force information, including, without
stockholder consideration of a limitation, the identity and address
proposal over the opposition of the of the nominating stockholder, the
Chairman and the board by calling a class and number of shares of stock of
special meeting of stockholders prior FINOVA Group beneficially owned by the
to the time the Chairman or a majority stockholder and all information
of the whole board believes such regarding the proposed nominee that
consideration to be appropriate. would be required to be included in a
proxy statement soliciting proxies for
ADVANCE NOTICE PROVISIONS FOR the proposed nominee. A stockholder's
STOCKHOLDER NOMINATIONS AND notice relating to the conduct of
STOCKHOLDER PROPOSALS. The bylaws business other than the nomination of
establish an advance notice procedure directors must contain certain
for stockholders to nominate information about that business and
directors, or bring other business about the proposing stockholder,
before an annual meeting of including, without limitation, a brief
stockholders of FINOVA Group. description of the business the
stockholder proposes to bring before
A person may not be nominated for a the meeting, the reasons for
director position unless that person conducting that business at such
is nominated by or at the direction of meeting, the name and address of such
the board or by a stockholder who has stockholder, the class and number of
given appropriate notice to FINOVA shares of stock of FINOVA Group
Group's Secretary during the periods beneficially owned by that stockholder
noted below prior to the meeting. and any material interest of the
Similarly, stockholders may not bring stockholder in the business so
business before an annual meeting proposed. If the Chairman or other
unless the stockholder has given officer presiding at a meeting
FINOVA Group's Secretary appropriate determines that a person was not
notice of their or its intention to nominated, or other business was not
bring that business before the brought before the meeting, in
meeting. FINOVA Group's Secretary must accordance with these procedures, the
receive the nomination or proposal person will not be eligible for
between 70 and 90 days before the election as a director, or the
first anniversary of the prior year's business will not be conducted at the
annual meeting. If FINOVA Group's meeting, as appropriate.
annual meeting date is advanced by
more than 20 days or delayed by more Advance notice of nominations or
than 70 days from that anniversary proposed business by stockholders
date, then we must receive the notice gives the board time to consider the
between 90 days before the meeting and qualifications of the proposed
the later of the 70th day before the nominees, the merits of the proposals
meeting or 10 days after the meeting and, to the extent deemed necessary or
date is first publicly announced. desirable by the board, to inform
stockholders about those matters. The
If the board increases the number board also may recommend positions
of directors and if we have not regarding those nominees or proposals,
publicly announced nominees for each so that stockholders can better decide
open position within 80 days before whether to attend the meeting or to
the first anniversary of the prior grant a proxy regarding the nominee or
year's annual meeting, stockholders that business.
may nominate directors for the new
position, but only those newly created Although the bylaws do not give the
positions, if FINOVA Group's Secretary board any power to approve or
receives the notice no later than 10 disapprove stockholder nominations for
days following public announcement of the election of directors or proposals
that change. for action, these procedures may
preclude a contest for the election of
Stockholders may nominate directors directors or the consideration of
only at a special meeting by sending stockholder proposals if the proper
appropriate notice for procedures are not followed, and of
discouraging or deterring a third
party from conducting a solicitation
of proxies to elect its own slate of
directors or to approve its
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own proposal, without regard to stock, or in the amount of voting
whether consideration of such nominees securities, outstanding of at least
or proposals might be harmful or 20%, subject to certain exceptions. If
beneficial to FINOVA Group and its the approval of FINOVA Group's
stockholders. stockholders is not required for the
issuance of shares of preferred stock
PREFERRED STOCK. FINOVA Group's or common stock, the board may
certificate of incorporation determine not to seek stockholder
authorizes the board to establish one approval.
or more series of preferred stock and
to determine, with respect to any Although the board has no intention
series of preferred stock, the terms at the present time of doing so, it
and rights of such series, including could issue a series of preferred
(i) the designation of the series, stock that could, depending on its
(ii) the number of shares of the terms, impede a merger, tender offer
series, which the board may (except or other takeover attempt. The board
where otherwise provided by the terms will make any determination to issue
of such series) increase or decrease shares with those terms based on its
(but not below the number of shares judgment as to the best interests of
thereof then outstanding), (iii) FINOVA Group and its stockholders. The
whether dividends, if any, will be board, in so acting, could issue
cumulative or noncumulative and the preferred stock having terms that
dividend rate of the series, if any, could discourage an acquisition
(iv) the dates at which dividends, if attempt in which an acquiror would
any, will be payable, (v) the change the composition of the board,
redemption rights and price or prices, including a tender offer or other
if any, for shares of the series, (vi) transaction. An acquisition attempt
the terms and amounts of any sinking could be discouraged in this manner
fund provided for the purchase or even if some, or a majority, of FINOVA
redemption of shares of the series, Group's stockholders might believe it
(vii) the amounts payable on shares of to be in their best interests or in
the series in the event of any which stockholders might receive a
voluntary or involuntary liquidation, premium for their stock over the then
dissolution or winding up of the current market price of the stock.
FINOVA Group's affairs, (viii) whether
the shares of the series will be MERGER/SALE OF ASSETS. FINOVA
convertible into shares of any other Group's certificate of incorporation
class or series, or any other provides that certain "business
security, of FINOVA Group or any other combinations" must be approved by the
corporation, and, if so, the holders of at least 66 2/3% of the
specification of another class or voting power of the shares not owned
series or another security, the by an "interested shareholder", unless
conversion price or prices or rate or the business combinations are approved
rates, any adjustments to the prices by the "Continuing Directors" or meet
or rates, the date or dates as of certain requirements regarding price
which the shares shall be convertible and procedure. The terms quoted in
and all other terms and conditions this paragraph are defined in the
upon which the conversion may be made, certificate of incorporation.
(ix) restrictions on the issuance of
shares of the same series or of any AMENDMENT OF CERTAIN PROVISIONS OF
other class or series and (x) the THE CERTIFICATE OF INCORPORATION AND
voting rights, if any, of the holders BYLAWS. Under Delaware law,
of shares of the series. stockholders may adopt, amend or
repeal the bylaws and, with approval
FINOVA Group believes that the of the board, the certificate of
ability of the board to issue one or incorporation of a corporation. In
more series of preferred stock will addition, a corporation's board may
provide FINOVA Group with flexibility adopt, amend or repeal the bylaws if
in structuring possible future allowed by the certificate of
financings and acquisitions, and in incorporation. FINOVA Group's
meeting other corporate needs which certificate of incorporation requires
might arise. The authorized shares of a vote of (i) at least 80% of the
preferred stock, as well as shares of outstanding shares of voting stock,
common stock, will be available for voting together as a single class, to
issuance without further action by amend provisions of the certificate of
FINOVA Group's stockholders, unless incorporation relating to the
approval is required by applicable law prohibition of stockholder action
or the rules of any stock exchange or without a meeting; the number,
automated quotation system on which election and term of FINOVA Group's
FINOVA Group's securities are listed directors; and the removal of
or traded. The NYSE currently requires directors; (ii) at least 66 2/3% of
stockholder approval in several the outstanding shares of voting
instances, including where the present stock, voting together as a single
or potential issuance of shares could
result in an increase in the number of
shares of common
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<PAGE>
class, to amend the provisions of the subsequent to that date, the board and
certificate of incorporation relating 66 2/3% of the outstanding voting
to approval of certain business stock not owned by the interested
combinations; and (iii) at least a stockholder approved the business
majority of the outstanding shares of combination. Except as specified by
voting stock, voting together as a Delaware law, an interested
single class, to amend all other stockholder includes (x) any person
provisions of the certificate of that is the owner of 15% or more of
incorporation. FINOVA Group's the outstanding voting stock of the
certificate of incorporation further corporation, or is an affiliate or
provides that the bylaws may be associate of the corporation and was
amended by the board or by the the owner of 15% or more of the
affirmative vote of the holders of at outstanding voting stock of the
least 80% of the voting power of the corporation, at any time within three
outstanding shares of voting stock, years immediately prior to the
voting together as a single class. relevant date, and (y) the affiliates
These supermajority voting and associates of that person.
requirements make the amendment by
stockholders of the bylaws or of any Under certain circumstances,
of the provisions of the certificate Delaware law makes it more difficult
of incorporation described above more for an "interested stockholder" to
difficult, even if a majority of enter into various business
FINOVA Group's stockholders believe combinations with a corporation for a
that amendment would be in their best three-year period, although
interests. stockholders may adopt an amendment to
a corporation's certificate of
ANTITAKEOVER LEGISLATION. Subject incorporation or bylaws excluding the
to certain exceptions, Delaware law corporation from those restrictions.
does not allow a corporation to engage However, FINOVA Group's certificate of
in a business combination with any incorporation and bylaws do not
"interested stockholder" for a exclude FINOVA Group from the
three-year period following the date restrictions imposed under Delaware
that the stockholder becomes an law. These provisions of Delaware law
interested stockholder, unless (i) may encourage companies interested in
prior to that date, the board approved acquiring FINOVA Group to negotiate in
either the business combination or the advance with the board, since the
transaction which resulted in the stockholder approval requirement would
stockholder becoming an interested be avoided if a majority of the board
stockholder, (ii) on that date, the approves either the business
interested stockholder owned at least combination or the transaction which
85% of the voting stock of the results in the stockholder becoming an
corporation outstanding at the time interested stockholder.
the transaction commenced (excluding
certain shares) or (iii) on or
DESCRIPTION OF DEPOSITARY SHARES
The following summary of certain Agreement") between us and a bank or
provisions of the Deposit Agreement, trust company selected by us having
the depositary shares and depositary its principal office in the U.S. and
receipts is not complete. You should having a combined capital and surplus
refer to the forms of Deposit of at least $50 million. Subject to
Agreement and depositary receipts the terms of the Deposit Agreement,
relating to each series of preferred each owner of depositary shares will
stock that will be filed with the SEC. be entitled, in proportion to the
To obtain copies of these documents, applicable fractional interests in
see "Where You Can Find More shares of preferred stock underlying
Information" on page 2. the depositary shares to all the
rights and preferences of the
GENERAL preferred stock underlying the
We may offer fractional interests depositary shares. Those rights
in shares of preferred stock, instead include dividend, voting, redemption,
of shares of preferred stock. If we conversion and liquidation rights.
do, we will have a depositary issue to
the public receipts for depositary The depositary shares will be
shares, each of which will represent evidenced by depositary receipts
fractional interests of a particular issued under the Deposit Agreement.
series of preferred stock. Individuals purchasing the fractional
interests in shares of the related
We will deposit shares of any series of preferred stock will receive
series of preferred stock underlying depositary receipts according to the
the depositary shares under a separate terms of the offering described in the
Deposit Agreement (the "Deposit supplement.
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DIVIDENDS AND OTHER DISTRIBUTIONS Whenever we redeem shares of preferred
The depositary will distribute all stock held by the depositary, the
cash dividends or other cash depositary will redeem as of the same
distributions received for the redemption date, the number of
preferred stock to the record holders depositary shares representing the
of depositary shares representing the preferred stock. The depositary shares
preferred stock in proportion to the to be redeemed will be selected by lot
number of depositary shares owned by or pro rata as determined by the
those holders on the relevant record depositary when less than all
date. The depositary will distribute outstanding depositary shares will be
only the amount that can be redeemed.
distributed without attributing to any
holder of depositary shares a fraction After the redemption date, the
of one cent. The undistributed balance depositary shares redeemed will no
will be added to and treated as part longer be outstanding. When this
of the next amount received by the occurs, all rights of the holders will
depositary for distribution to record cease, except the right to receive
holders of depositary shares. money, securities or other property
payable upon such redemption and any
If there is a distribution other money, securities or other property
than in cash, the depositary will that the holders of depositary shares
distribute property received by it to were entitled to on the redemption
the record holders of depositary upon surrender to the depositary of
shares, in proportion, if possible, to the depositary receipts evidencing the
the number of depositary shares owned depositary shares redeemed.
by those holders, unless the
depositary determines (after VOTING THE PREFERRED STOCK
consulting with us) that it cannot Upon receipt of notice of any
make the distribution. If this occurs, meeting at which the holders of the
the depositary may, with our approval, preferred stock are entitled to vote,
sell the property and distribute the the depositary will mail all relevant
net proceeds from the sale to the information to the record holders of
holders of depositary shares. the depositary shares representing the
preferred stock. The record holders
The Deposit Agreement also will may instruct the depositary how to
state how any subscription or similar vote the shares of preferred stock
rights offered by us to holders of the underlying their depositary shares.
preferred stock will be made available The depositary will try, if practical,
to holders of depositary shares. to vote the number of shares of
preferred stock underlying the
CONVERSION AND EXCHANGE depositary shares according to the
If any series of preferred stock instructions, and we will agree to
underlying the depositary shares is take all reasonable action requested
subject to conversion or exchange, by the depositary so the depositary
each record holder of depositary may follow the instructions.
receipts may convert or exchange the
depositary shares represented by those AMENDMENT AND TERMINATION OF
depositary receipts. DEPOSITARY AGREEMENT
The form of depositary receipt and
REDEMPTION OF DEPOSITARY SHARES any provision of the Deposit Agreement
If a series of the preferred stock may be amended by agreement between us
underlying the depositary shares is and the depositary. However, any
subject to redemption, the depositary amendment that materially and
will redeem the depositary shares from adversely alters the rights of the
the proceeds received by the existing holders of depositary shares
depositary in the redemption, in whole will not be effective unless approved
or in part, of the series of the by the record holders of at least a
preferred stock held by the majority of the depositary shares then
depositary. The depositary will mail outstanding. We or the depositary may
notice of redemption within 30 to 60 only terminate the Deposit Agreement
days prior to the date fixed for if (a) all related outstanding
redemption to the record holders of depositary shares have been redeemed
the depositary shares to be redeemed or (b) there has been a final
at their addresses appearing in the distribution of the preferred stock of
depositary's books. The redemption the relevant series in connection with
price per depositary share will equal our liquidation, dissolution or
the applicable fraction of the winding up and that distribution has
redemption price per share payable on been distributed to the holders of the
such series of the preferred stock. related depositary shares.
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CHARGES OF DEPOSITARY MISCELLANEOUS
We will pay all transfer and other The depositary will send to the
taxes and governmental charges arising holders of depositary shares all
solely from the existence of the reports and communications from us
depositary arrangements. We will pay that we must furnish to the holders of
associated charges of the depositary preferred stock.
for the initial deposit of the
preferred stock and any redemption of We and the depositary will not be
the preferred stock. Holders of liable if we are prevented or delayed
depositary shares will pay transfer by law or any circumstance beyond our
and other taxes and governmental control in performing our obligations
charges and any other charges stated under the Deposit Agreement. Those
in the Deposit Agreement to be for obligations will be limited to
their accounts. performance in good faith of duties
set forth in the Deposit Agreement. We
RESIGNATION AND REMOVAL and the depositary will not be
OF DEPOSITARY obligated to prosecute or defend any
The depositary may resign by legal proceeding connected with any
delivering notice to us, and we may depositary shares or preferred stock
remove the depositary. Resignations or unless satisfactory indemnity is
removals will take effect upon the furnished. We and the depositary may
appointment and acceptance of a rely upon written advice of counsel or
successor depositary. We must appoint accountants, or information provided
a successor depositary within 60 days by persons presenting preferred stock
after delivery of the notice of for deposit, holders of depositary
resignation or removal. The successor shares, or other persons believed to
depositary must be a bank or trust be competent and on documents believed
company having its principal office in to be genuine.
the U.S. and having a combined capital
and surplus of at least $50 million.
DESCRIPTION OF WARRANTS
We may issue warrants for the solely as our agent for the warrants
purchase of debt securities, preferred and will not act for or on behalf of
stock or common stock. We may issue the holders or beneficial owners of
warrants independently or together warrants. This summary of certain
with debt securities, common stock or provisions of the warrants is not
preferred stock or attached to or complete. You should refer to the
separate from the offered securities. provisions of the Warrant Agreement
We will issue each series of warrants that will be filed with the SEC as
under a separate warrant agreement (a part of the offering of any warrants.
"Warrant Agreement") between us and a To obtain a copy of this document, see
bank or trust company, as warrant "Where You Can Find More Information"
agent. The warrant agent will act on page 2.
PLAN OF DISTRIBUTION
FINOVA Group and FINOVA Capital may civil liabilities under the Federal
offer securities directly or through securities laws and other laws. The
underwriters, dealers or agents. The underwriters' obligations to purchase
supplement will identify those securities will be subject to certain
underwriters, dealers or agents and conditions and generally will require
will describe the plan of them to purchase all of the securities
distribution, including commissions to if any are purchased.
be paid. If we do not name a firm in
the supplement, that firm may not Unless otherwise noted in the
directly or indirectly participate in supplement, the securities will be
any underwriting of those securities, offered by the underwriters, if any,
although it may participate in the when, as and if issued by us,
distribution of securities under delivered to and accepted by the
circumstances entitling it to a underwriters and subject to their
dealer's allowance or agent's right to reject orders in whole or in
commission. part.
Any underwriting agreement probably FINOVA Group and FINOVA Capital may
will entitle the underwriters to sell securities to dealers, as
indemnity against certain principals. Those dealers
20
<PAGE>
then may resell the securities to the transactions and penalty bids in
public at varying prices set by those accordance with Regulation M under the
dealers from time to time. Securities Exchange Act of 1934.
Over-allotment involves sales in
FINOVA Group and FINOVA Capital excess of the offering size, which
also may offer securities through creates a short position. Stabilizing
agents. Agents generally act on a transactions permit bids to purchase
"best efforts" basis during their the underlying security so long as the
appointment, meaning they are not stabilizing bids do not exceed a
obligated to purchase securities. specified maximum. Short covering
transactions involve purchases of the
Dealers and agents may be entitled securities in the open market after
to indemnification as underwriters by the distribution is completed to cover
us against certain liabilities under short positions. Penalty bids permit
the Federal securities laws and other the underwriters to reclaim a selling
laws. concession from a dealer when the
securities originally sold by the
FINOVA Group and FINOVA Capital or dealer are purchased in a covering
the underwriters or agents may solicit transaction to cover short positions.
offers by institutions approved by us Those activities may cause the price
to purchase securities under contracts of the securities to be higher than it
providing for future payment. would otherwise be. The underwriters
Permitted institutions include may engage in any such activities on
commercial and savings banks, any exchange or other market in which
insurance companies, pension funds, the securities may be traded. If
investment companies, educational and commenced, the underwriters may
charitable institutions and others. discontinue those activities at any
Certain conditions apply to those time.
purchases.
The supplement or pricing
Any underwriter may engage in supplement, as applicable, will set
over-allotment, stabilizing trans- forth the anticipated delivery date of
actions, short covering the securities being sold at that
time.
LEGAL MATTERS
Unless otherwise noted in a Group and FINOVA Capital, will pass on
supplement, William J. Hallinan, Esq., the legality of the securities offered
Senior Vice President-General Counsel through this prospectus and any
of FINOVA Group and FINOVA Capital, or supplement. Brown & Wood LLP will act
Richard Lieberman, Esq., Vice as counsel for any underwriters or
President-Assistant General Counsel of agents, unless otherwise noted in a
FINOVA supplement.
EXPERTS
Deloitte & Touche LLP, independent on Form 10-K. The financial statements
auditors, have audited the financial are incorporated into this prospectus
statements for FINOVA Group and FINOVA by reference in reliance upon their
Capital incorporated in this report given upon their authority as
prospectus by reference from our experts in accounting and auditing.
Annual Reports
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---------------------------------------
YOU SHOULD RELY ONLY ON THE |
INFORMATION CONTAINED IN OR | FINOVA
INCORPORATED BY PROVIDE YOU WITH |
DIFFERENT INFORMATION. |
|
WE ARE NOT MAKING AN OFFER OF THESE |
SECURITIES IN ANY LOCATION WHERE |
THE OFFER IS NOT PERMITTED. |
|
YOU SHOULD NOT ASSUME THAT THE |
INFORMATION IN THIS PROSPECTUS, |
INCLUDING INFORMATION INCORPORATED |
BY REFERENCE, IS ACCURATE AS OF ANY |
DATE OTHER THAN THE DATE ON THE | FINOVA Capital Corporation
FRONT OF THE PROSPECTUS OR THE DATE |
OF THE INFORMATION IN THOSE |
INCORPORATED REPORTS, AS | $275,000,000
APPLICABLE. | 5 7/8% Notes
| Due October 15, 2001
------------ |
|
TABLE OF CONTENTS |
Page |
---- |
PROSPECTUS SUPPLEMENT |
|
FINOVA Capital Corporation ......S-2 |
Note Terms ......................S-2 |
Underwriting ....................S-3 |
Recent Developments .............S-3 |
Notice to Canadian Residents ....S-4 |
|
PROSPECTUS | PROSPECTUS SUPPLEMENT
|
Where You Can Find More |
Information .................. 2 |
The Companies ................... 2 |
Selected Financial Information .. 5 |
Ration Of Income To Total Fixed |
Charges ...................... 5 |
Ratio Of Income To Combined Fixed |
Charges And Preferred | DEUTSCHE BANK SECURITIES
Stock Dividends............... 5 |
Speical Note Regarding | CREDIT SUISSE FIRST BOSTON
Forward-Looking Statements ... 6 |
Use of Proceeds ................. 6 | SALOMON SMITH BARNEY
Description Of Debt Securities .. 7 |
Description Of Capital Stock ....13 |
Description Of Depositary |
Shares .......................18 |
Description of Warrants .........20 |
Plan of Distribution ............20 |
Legal Matters ...................21 |
Experts .........................21 | Dated October 16, 1998
