<PAGE> 1
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PROSPECTUS SUPPLEMENT Filed pursuant to rule 424(b)(5)
MARCH 30, 1999 Reg No. 333-73357
(TO PROSPECTUS DATED MARCH 16, 1999)
$150,000,000
AMERCO
[UHAUL LOGO]
7.20% SENIOR NOTES DUE 2002
AMERCO:
- - We are a holding company for U-Haul International, Inc., Republic Western
Insurance Company, Oxford Life Insurance Company and Amerco Real Estate
Company. U-Haul, which engages in the rental of vehicles and support items to
the do-it-yourself moving customer, comprises greater than 80% of our total
revenues.
- - AMERCO
1325 Airmotive Way, Suite 100
Reno, Nevada 89502-3239
(775) 688-6300
THE OFFERING:
- - Use of Proceeds: We intend to use the net proceeds from the sale of the notes
to repay floating rate indebtedness outstanding under our revolving credit
agreement.
- - Delivery: We expect the delivery of the notes will be made to investors on or
about April 5, 1999.
THE NOTES:
- - Maturity: April 1, 2002.
- - Interest Payments: Semi-annually in cash in arrears on April 1 and October 1,
commencing on October 1, 1999.
- - Redemption: We can redeem some or all of the notes at our option on at least
30 days' notice at the redemption prices described on page S-8.
- - Ranking of Notes: The notes rank equally with all other senior indebtedness
of AMERCO, and senior in right of payment to all future subordinated
indebtedness of AMERCO.
PROPOSED TRADING FORMAT:
- - The notes will not be listed on any securities exchange or included in any
automated quotation system.
<TABLE>
<CAPTION>
PER
NOTE TOTAL
---- -----
<S> <C> <C>
Public offering price:...................................... 99.79% $149,685,000
Underwriting fees:.......................................... .50% $ 750,000
Proceeds to AMERCO:......................................... 99.29% $148,935,000
</TABLE>
BEFORE MAKING ANY INVESTMENT IN OUR COMPANY, YOU SHOULD CAREFULLY CONSIDER
CERTAIN RISKS THAT ARE DESCRIBED IN THE "RISK FACTORS" SECTION OF THE
ACCOMPANYING PROSPECTUS BEGINNING ON PAGE 7.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
NATIONSBANC MONTGOMERY SECURITIES LLC
MORGAN STANLEY DEAN WITTER
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<PAGE> 2
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... S-1
Use of Proceeds............................................. S-6
Capitalization.............................................. S-6
Description of Notes........................................ S-7
Underwriting................................................ S-16
Legal Matters............................................... S-17
PROSPECTUS
About this Prospectus....................................... 1
Where You Can Find More Information......................... 1
Special Note of Caution Regarding Forward-Looking
Statements................................................ 3
About AMERCO................................................ 4
The Offering................................................ 6
Risk Factors................................................ 7
Use of Proceeds............................................. 9
Ratio of Earnings to Fixed Charges.......................... 10
Description of Debt Securities.............................. 10
Plan of Distribution........................................ 24
Legal Opinions.............................................. 25
Experts..................................................... 25
</TABLE>
This document is in two parts. The first part is the prospectus supplement,
which describes the specific terms of the notes we are offering and certain
other matters relating to us and our business. The second part, the accompanying
prospectus, gives more general information, some of which does not apply to this
series of notes we are offering. Generally, when we refer to the prospectus, we
are referring to both parts combined. If the description of your notes varies
between the prospectus supplement and the accompanying prospectus, you should
rely on the information in the prospectus supplement.
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any other person to provide you
with additional or different information. If anyone provides you with different
or inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these notes in any jurisdiction
where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus supplement and the accompanying prospectus, as well
as information we previously filed with the Securities and Exchange Commission
and incorporated by reference, is accurate as of the date on the front cover of
this prospectus supplement only. Our business, financial condition, results of
operations and prospects may have changed since that date.
i
<PAGE> 3
SUMMARY
In this prospectus supplement, AMERCO and references to "we," "our," "ours"
and "us" includes all of our subsidiaries and predecessors, unless the context
otherwise requires. The following summary contains basic information about this
offering. It may not contain all the information that is important to you. The
"Description of Notes" section of this prospectus supplement contains more
detailed information regarding the terms and conditions of the notes.
OUR COMPANY
AMERCO owns all of the stock of our principal subsidiary, U-Haul
International, Inc. U-Haul rental operations represented over 80% of our total
revenue for each of the past five (5) fiscal years ended March 31, 1998. We also
own all the stock of Republic Western Insurance Company, Oxford Life Insurance
Company and Amerco Real Estate Company.
U-HAUL OPERATIONS
- U-Move Operations
Founded in 1945, U-Haul is primarily engaged, through its subsidiaries, in
the rental of trucks, automobile-type trailers, and support rental items to the
do-it-yourself moving customer which include the sale of moving items or moving
materials (such as boxes, tape, and packaging materials). Our do-it-yourself
moving business operates under the U-Haul name through an extensive and
geographically diverse distribution network of approximately 1,100 company-owned
U-Haul centers and approximately 15,000 independent dealers throughout the
United States and Canada. We believe that we have more moving equipment rental
locations than our two largest competitors combined. The U-Haul rental equipment
fleet consists of 92,900 trucks, 79,600 trailers, and 18,300 tow dollies.
Additionally, U-Haul sells related products (such as boxes, tape, and packaging
materials).
- Self-Storage Rental Operations
U-Haul entered the self-storage business in 1974 and offers for rent more
than 27.2 million square feet of self-storage space through over 800
company-owned or managed storage locations. We believe we are the second largest
self-storage operator (in terms of square feet) in the industry. We believe our
self-storage operations are complementary to the do-it-yourself moving business.
All of our self-storage space is located at or near one or more U-Haul centers
or independent U-Haul dealers.
INSURANCE OPERATIONS
- Republic Western
Republic Western originates and reinsures property and casualty type
insurance products for independent third parties, U-Haul customers, and U-Haul.
Republic Western's principal strategy is to capitalize on its knowledge of
insurance products aimed at the moving and rental markets. Approximately 29.8%
of Republic Western's written premiums relate to insurance underwriting
activities involving affiliates of AMERCO. Approximately 90.8% of Republic
Western's invested assets are in investment grade (NAIC-2 or greater) fixed
income securities. Republic Western is rated "A+-VIII" by A.M. Best.
- Oxford
Oxford primarily reinsures life, health, and annuity insurance products and
administers our self-insured employee health plan. Approximately 2.9% of
Oxford's premium revenues are from business with affiliates of AMERCO.
Approximately 91.4% of Oxford's invested assets are in investment grade (NAIC-2
or greater) fixed income securities. Oxford is rated "A-VII" by A.M. Best.
S-1
<PAGE> 4
REAL ESTATE OPERATIONS
Amerco Real Estate owns or actively manages over 1,150 properties
throughout the United States and Canada. In addition to its U-Haul operations,
Amerco Real Estate actively seeks to lease or dispose of our surplus properties.
GENERAL
The following chart represents the corporate structure of the major
operating subsidiaries of AMERCO:
Corporate Structure Flow Chart of AMERCO
Our principal executive office is located at 1325 Airmotive Way, Suite 100,
Reno, Nevada 89502, and our telephone number is (775) 688-6300.
S-2
<PAGE> 5
THE OFFERING
Issuer........................ AMERCO.
Securities.................... $150 million principal amount of 7.20% senior
notes due 2002.
Maturity...................... The notes will mature April 1, 2002.
Interest Rate................. The notes will bear interest at the rate of
7.20% per annum.
Interest Payment Dates........ We will pay interest on the notes semi-annually
on April 1 and October 1 beginning October 1,
1999.
Optional Redemption........... We may redeem all or part of the notes at our
option, on at least 30 days' notice, at the
redemption prices described herein, plus any
accrued and unpaid interest to the date fixed
for redemption.
Change in Control............. If certain types of change in control were to
occur, each holder of notes would have the
option to require us to repurchase such notes,
in whole or in part, at a price equal to 101%
of the principal amount of those notes, plus
any accrued and unpaid interest to the purchase
date.
Ranking....................... The notes will be general unsecured obligations
of AMERCO. The notes will rank pari passu in
right of payment with all senior indebtedness
of AMERCO, and senior in right of payment to
all future subordinated indebtedness of AMERCO.
The notes are not guaranteed by any AMERCO
subsidiary. The notes will be effectively
subordinated to (i) any secured indebtedness of
AMERCO to the extent of the assets securing
that indebtedness and (ii) all indebtedness for
money borrowed and other liabilities of our
subsidiaries. As of December 31, 1998, after
giving effect to this offering and the
application of the proceeds thereof, AMERCO
would have had approximately $1.023 billion of
unsecured debt (including the notes) and the
subsidiaries had approximately $400,000 of
secured debt.
Certain Covenants............. The Supplemental Indenture governing the notes
will contain covenants that will, among other
things, limit the ability of AMERCO to:
- incur certain liens securing indebtedness;
- engage in certain sale-leaseback
transactions; and
- enter into certain consolidations, mergers,
or transfers of substantially all of AMERCO's
assets.
Use of Proceeds............... The net proceeds from the sale of the notes
will be used to repay floating rate
indebtedness outstanding under our revolving
credit agreement.
Risk Factors.................. See "Risk Factors" in the accompanying
prospectus on page 7 for a discussion of
certain factors you should consider carefully
before deciding whether to invest in the notes.
S-3
<PAGE> 6
SUMMARY FINANCIAL DATA
We derived the summary financial data presented below for each of the three
fiscal years in the period ended March 31, 1998 from our audited consolidated
financial statements. We derived the summary financial data for the nine month
periods ended December 31, 1997 and 1998 from our unaudited consolidated
financial statements, which in management's opinion include all normal,
recurring adjustments necessary for a fair statement of the information for the
periods presented. Results of operations for a nine month period are not
necessarily indicative of results of operations for a full year.
You should read the financial data presented below in conjunction with the
consolidated financial statements, the related notes and other financial
information contained in our Annual Report on Form 10-K for the year ended March
31, 1998 and our Quarterly Reports on Form 10-Q for the quarters ended June 30,
1998, September 30, 1998 and December 31, 1998, which are incorporated in this
prospectus supplement and the accompanying prospectus by reference. See "Where
You Can Find More Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
FOR THE YEARS ENDED MARCH 31, ENDED DECEMBER 31,
------------------------------------ -----------------------
1998 1997 1996 1998 1997
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT NUMBER OF SHARES)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Rental and net sales..................... $1,195,634 1,146,751 1,107,782 991,940 944,397
Premiums and net investment income....... 214,308 213,024 200,238 206,139 156,278
---------- ---------- ---------- ---------- ----------
1,409,942 1,359,775 1,308,020 1,198,079 1,100,675
---------- ---------- ---------- ---------- ----------
Operating expenses and cost of
sales(1)(2).............................. 901,486 878,397 833,576 748,077 698,950
Benefits, losses and amortization of
deferred acquisition costs............... 208,607 194,768 174,646 147,370 141,593
Lease expense.............................. 89,879 85,903 69,097 87,632 67,027
Depreciation, net(3)....................... 69,655 66,742 83,989 53,480 48,795
---------- ---------- ---------- ---------- ----------
1,269,627 1,225,810 1,161,308 1,036,559 956,365
---------- ---------- ---------- ---------- ----------
Earnings from operations................... 140,315 133,965 146,712 161,520 144,310
Interest expense, net...................... 64,016 50,437 50,486 44,586 49,301
---------- ---------- ---------- ---------- ----------
Pretax earnings from operations............ 76,299 83,528 96,226 116,934 95,009
Income tax expense......................... (27,643) (29,344) (35,832) (41,055) (32,169)
---------- ---------- ---------- ---------- ----------
Earnings from operations before
extraordinary loss on early
extinguishment of debt................... 48,656 54,184 60,394 75,879 62,840
Extraordinary loss on early extinguishment
of debt, net............................. (13,672) (2,319) -- -- (13,984)
---------- ---------- ---------- ---------- ----------
Net earnings............................... $ 34,984 51,865 60,394 75,879 48,856
========== ========== ========== ========== ==========
Weighted average common shares
outstanding.............................. 21,896,101 25,479,651 35,736,335 21,934,264 21,890,250
BALANCE SHEET DATA:
Total property, plant and equipment,
net.................................... $1,275,756 1,247,066 1,316,715 1,260,962 1,351,045
Total assets............................. 2,913,277 2,718,994 2,823,407 3,001,108 2,857,945
Notes and loans payable.................. 1,025,323 983,550 998,220 1,023,452 1,074,409
Stockholders' equity(4).................. 595,059 602,320 649,548 621,788 638,052
</TABLE>
- ---------------
(Footnotes on next page)
S-4
<PAGE> 7
(1) Reflects the adoption of Statement of Position 93-7, "Reporting on
Advertising Costs" during the year ended March 31, 1996.
(2) Reflects the adoption of Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use" during
the year ended March 31, 1998.
(3) Reflects the change in estimated residual value during the years ended March
31, 1998 and 1996.
(4) Reflects the adoption of Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" as of
October 1, 1998 during the nine months ended December 31, 1998.
S-5
<PAGE> 8
USE OF PROCEEDS
AMERCO intends to use approximately $148 million of the net proceeds from
the sale of the notes to repay floating rate indebtedness outstanding under our
revolving credit agreement dated June 30, 1997 (which expires on June 30, 2002).
The debt to be repaid with the proceeds of the notes bears interest at the rate
of LIBOR, plus .25% (ranging from 5.21% to 5.30%). The debt incurred under the
revolving credit agreement was used for working capital purposes.
CAPITALIZATION
The following table sets forth the consolidated capitalization of AMERCO at
December 31, 1998, and as adjusted to give effect to the issuance of the notes
offered hereby.
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt:
5-year revolving credit facility.......................... $ 231,000 81,000
Senior notes due 2003..................................... 175,000 175,000
Medium-Term notes and other............................... 317,452 317,452
Notes Payable-Bond Backed Asset Trust..................... 300,000 300,000
Securities offered hereunder.............................. -- 150,000
---------- ----------
$1,023,452 1,023,452
========== ==========
Stockholders' equity:
Serial preferred stock, with or without par value,
50,000,000 shares authorized --
Series A preferred stock, with no par value, 6,100,000
shares authorized; 6,100,000 shares issued and
outstanding........................................... $ -- --
Series B preferred stock, with no par value, 100,000
shares authorized; 50,000 shares issued and
outstanding........................................... -- --
Serial common stock, with or without par value,
150,000,000 shares authorized --
Series A common stock of $0.25 par value, 10,000,000
shares authorized; 5,762,495 shares issued............ 1,441 1,441
Common stock of $0.25 par value, 150,000,000 shares
authorized; 36,487,505 shares issued.................. 9,122 9,122
Additional paid-in capital............................. 288,444 288,444
Accumulated other comprehensive income................. (14,862) (14,862)
Retained earnings...................................... 714,432 714,432
---------- ----------
998,577 998,577
Less:
Cost of common shares in treasury, net (19,635,913
shares)............................................... 359,723 359,723
Unearned employee stock ownership plan shares.......... 17,066 17,066
---------- ----------
Total stockholders' equity........................ $ 621,788 621,788
========== ==========
</TABLE>
S-6
<PAGE> 9
DESCRIPTION OF NOTES
The following description of the particular terms of the notes offered
hereby (referred to in the accompanying prospectus as "Offered Securities")
supplements, and to the extent inconsistent therewith supersedes, the
description of the general terms and provisions of Offered Securities set forth
in the accompanying prospectus, to which description reference is hereby made.
You can find the definitions of certain terms used in this description under
"-- Certain Definitions." Capitalized terms not otherwise defined herein have
the meanings given to them in the accompanying prospectus. For purposes of the
following description, references to AMERCO do not include any of our
subsidiaries.
The notes will be issued under the Senior Indenture, dated as of April 1,
1999 (the "Senior Indenture"), as supplemented by a Supplemental Indenture, to
be dated as of April 5, 1999 (the "Supplemental Indenture") between AMERCO and
The Bank of New York, as trustee (the "trustee") and will be limited to
$150,000,000 aggregate principal amount and will mature on April 1, 2002.
Subject to the following paragraph, the notes will bear interest at the rate per
annum shown on the cover of this prospectus supplement from and including April
5, 1999 or from the most recent interest payment date on which interest has been
paid or provided for, payable semiannually on April 1 and October 1 of each
year, commencing October 1, 1999, to the person in whose name a note (or any
predecessor note) is registered at the close of business on the March 15 or
September 15, as the case may be, next preceding that interest payment date.
The notes will be general unsecured obligations of AMERCO. The notes will
rank pari passu in right of payment with all senior indebtedness of AMERCO, and
senior in right of payment to all future subordinated indebtedness of AMERCO.
The notes will not be guaranteed by any of our subsidiaries. The notes will be
effectively subordinated to (i) any secured indebtedness of AMERCO to the extent
of the assets securing that indebtedness and (ii) all indebtedness for money
borrowed and other liabilities of our subsidiaries. As of December 31, 1998,
after giving effect to this offering and the application of the proceeds
thereof, AMERCO would have had approximately $1.023 billion of unsecured debt
(including the notes) and the subsidiaries had approximately $400,000 of secured
debt.
The notes are obligations exclusively of AMERCO. Since the operations of
AMERCO are primarily conducted through subsidiaries, our cash flow and the
consequent ability to service our debt, including the notes, is primarily
dependent upon the earnings of our subsidiaries and the distribution of those
earnings to, or upon loans or other payments of funds by our subsidiaries to,
AMERCO. The payment of dividends and the making of loans and advances to AMERCO
by our subsidiaries may be subject to statutory or insurance regulatory
restrictions, are dependant upon the earnings of our subsidiaries and are
subject to various business considerations.
The following description is a summary of the material provisions of the
Supplemental Indenture. It does not restate that agreement in its entirety. We
urge you to read the Supplemental Indenture and the Indenture because they, and
not this description, define your rights as holders of the notes.
BOOK-ENTRY SYSTEM
The notes will be represented by one or more permanent global notes
deposited with, or on behalf of, The Depository Trust Company, as Depository
under the Senior Indenture and the Supplemental Indenture (the "Depository"),
and registered in the name of the Depository's nominee. Except as set forth in
the accompanying prospectus, each permanent global note may be transferred, in
whole and not in part, only to another nominee of the Depository or to a
successor of the Depository or its nominee. A further description of the
Depository's procedures with respect to permanent global notes representing the
notes is set forth in the accompanying prospectus under "Description of Debt
Securities -- Book-Entry System."
SAME-DAY FUNDS SETTLEMENT SYSTEM AND PAYMENT
Settlement for the notes will be made by the underwriters in immediately
available funds. All payments of principal and interest will be made by AMERCO
in immediately available funds or, at the
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<PAGE> 10
option of AMERCO in the case of notes issued in definitive form, by check in the
case of interest payments.
Secondary trading in long-term notes of corporate issuers is generally
settled in clearinghouse or next-day funds. In contrast, the notes will trade in
the Depository's same-day funds settlement system until maturity, and secondary
market trading activity in the notes will therefore be required by the
Depository to settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on
trading activity in the notes.
OPTIONAL REDEMPTION
The notes will be redeemable, in whole or in part, at AMERCO's option at
any time at a redemption price equal to the greater of (i) 100% of the principal
amount of the notes, and (ii) as determined by the Quotation Agent, the sum of
the present values of the remaining scheduled payments of principal and interest
on the notes (not including any portion of those payments of interest accrued as
of the redemption date) discounted to the redemption date on a semi-annual basis
assuming a 360 day year consisting of twelve 30 day months at the Adjusted
Treasury Rate plus 35 basis points plus, in each case, accrued and unpaid
interest on the notes to the redemption date.
In the case of a partial redemption, selection of the notes for redemption
will be made pro rata, by lot or such other method as the trustee in its sole
discretion deems appropriate and fair. No notes of a principal amount of $1,000
or less will be redeemed in part. Notice of any redemption, whether in part or
in full, will be mailed by first class mail at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed at
its registered address. If any note is to be redeemed in part only, the notice
of redemption that relates to the note will state the portion of the principal
amount of the note to be redeemed. A new note in a principal amount equal to the
unredeemed portion of the note will be issued in the name of the holder of the
note upon surrender for cancellation of the original note. Unless we default in
payment of the redemption price, on and after the redemption date, interest will
cease to accrue on the notes or the portions of the notes called for redemption.
MANDATORY REDEMPTION
We will not be required to make any mandatory sinking fund payments with
regard to the notes.
PURCHASE OF THE NOTES AT THE OPTION OF THE HOLDER
If any Change in Control Triggering Event regarding AMERCO occurs on or
prior to maturity of the notes, each holder of notes will have the right, at the
holder's option, subject to the terms and conditions of the indenture, to
require AMERCO to purchase (the "Change in Control Purchase") all or any part of
the holder's notes (so long as the principal amount is $1,000 or an integral
multiple of $1,000) on the date that is 60 business days after the occurrence of
the Change in Control Triggering Event (the "Purchase Date"). If a holder
exercises this option, AMERCO will purchase that holder's notes for cash equal
to 101% of the principal amount of the notes plus any interest accrued and
unpaid on the notes through the Purchase Date (the "Purchase Price").
Within 30 business days after a Change in Control Triggering Event, AMERCO
is obligated to mail to the trustee and to all holders of the notes at their
addresses shown in the securities register (and to beneficial owners as required
by applicable law) a notice (the "Change in Control Notice") regarding the
Change in Control Triggering Event. The Change in Control Notice shall state,
among other things:
(i) the date by which the holder must give the Purchase Notice (as defined
below);
(ii) the Purchase Price;
(iii) the Purchase Date;
(iv) the name and address of the trustee and of any other office or agency
maintained for the purpose of the surrender of the notes for purchase;
S-8
<PAGE> 11
(v) the procedures for withdrawing a Purchase Notice; and
(vi) the procedures that a holder must follow to exercise these rights.
AMERCO will have the Change in Control Notice published in a daily newspaper of
national circulation.
To exercise the right to have us purchase the notes, a holder must deliver
written notice (a "Purchase Notice") to the trustee or to any other office or
agency maintained for that purpose of the holder's exercise of that right before
the close of business on the business day immediately prior to the Purchase
Date. The Purchase Notice must state:
(i) the certificate number of the note to be delivered by the holder for
purchase by AMERCO;
(ii) the portion of the principal amount of the notes to be purchased
(which must be $1,000 or an integral multiple of $1,000); and
(iii) that the notes will be submitted to AMERCO for purchase on the
Purchase Date pursuant to the applicable provisions of the notes.
A holder may withdraw any Purchase Notice by written notice of withdrawal
delivered to the trustee or to any other office or agency maintained for such
purpose no later than the business day immediately prior to the Purchase Date.
The notice of withdrawal must state the principal amount and the certificate
numbers of the notes as to which the withdrawal notice relates and the principal
amount, if any, of the holder's notes which remains subject to the original
Purchase Notice.
Payment of the Purchase Price for a note for which a Purchase Notice has
been delivered and not withdrawn is conditioned on delivery of the note
(together with any endorsements) to the trustee or to any other office or agency
maintained for that purpose, at any time (whether prior to, on or after the
Purchase Date) after delivery of the Purchase Notice. Payment of the Purchase
Price for the note will be made promptly following the later of the Purchase
Date or the time of delivery of the note. If AMERCO has deposited with the
trustee, in accordance with the Supplemental Indenture, money sufficient to pay
the Purchase Price of the note on the Purchase Date, then, on and after the
Purchase Date, the note will cease to be outstanding and interest on the note
will cease to accrue, whether or not the note is delivered to the trustee or to
any other office or agency maintained for that purpose, and all other rights of
the holder will terminate (other than the right to receive the Purchase Price on
delivery of the note). In accordance with the Supplemental Indenture, no notes
may be purchased pursuant to a Change in Control Triggering Event if there has
occurred and is continuing an event of default other than a default in the
payment of the Purchase Price, relating to the notes.
The occurrence of certain of the events that would constitute a Change in
Control could trigger a prepayment obligation under certain of AMERCO's credit
agreements and debt obligations, and failure to effect such prepayment could
constitute an event of default under such credit agreements and debt
obligations. If AMERCO is not able to obtain requisite consents or waivers from
the lenders under such credit agreements and the holders of such debt
obligations, AMERCO may be unable to fulfill our repurchase obligations
following a Change in Control Triggering Event, thereby resulting in a default
under the Supplemental Indenture.
AMERCO will comply with and make all filings required under all federal and
state securities laws regulating the purchase of the notes at the option of
holders upon a Change in Control Triggering Event, including, if applicable,
Section 14(e) of the Securities and Exchange Act of 1934, as amended, (the
"Exchange Act") and Rule 14e-1 promulgated under the Exchange Act and any other
applicable tender offer rules.
The Change in Control Purchase feature of the notes may in certain
circumstances make more difficult or discourage a takeover of AMERCO and, as a
result, the removal of incumbent management. If a Change in Control Triggering
Event were to occur, AMERCO cannot assure you that AMERCO would have sufficient
funds to pay the Purchase Price for all notes tendered by the holders. A default
by
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<PAGE> 12
AMERCO on our obligation to pay the Purchase Price could result in acceleration
of the payment of other indebtedness of AMERCO's that is outstanding at the
time.
CERTAIN COVENANTS
The Supplemental Indenture related to the Senior Indenture contains certain
restrictive covenants that are set forth below. Several additional restrictive
covenants relating to the notes, including restrictions on our ability to enter
into certain consolidations, mergers or transfers of substantially all of
AMERCO's assets, are contained in the Senior Indenture and are described in the
accompanying prospectus under "Description of Debt Securities -- Covenants."
Limitation on Liens Securing Indebtedness. AMERCO will not, and will not
permit any of our consolidated subsidiaries to, create or incur, or suffer to be
incurred or to exist, at any time, any Lien on our or their property, whether
now owned or hereafter acquired, or upon any income or profits therefrom, to
secure the payment of any indebtedness for money borrowed of AMERCO or of any of
our consolidated subsidiaries or of any other person, unless all obligations of
AMERCO on or in respect of the notes are equally and ratably and validly secured
by such Lien by proceedings and documents reasonably satisfactory to the
Trustee, except that the provisions of this paragraph shall not prohibit the
following:
(1) Liens existing as of the issue date securing indebtedness for
money borrowed of AMERCO and our consolidated subsidiaries outstanding on
such date;
(2) Liens (a) incurred after the issue date given (on or within 120
days of the date of acquisition, construction or improvement) to secure the
payment of the purchase price or construction costs incurred by AMERCO or
our consolidated subsidiaries in connection with the acquisition,
construction or improvement of real and personal property useful and
intended to be used in carrying on the business of AMERCO or such
consolidated subsidiary, or (b) on fixed assets useful and intended to be
used in carrying on the business of AMERCO or our consolidated subsidiaries
existing at the time of acquisition or construction thereof by AMERCO or
such consolidated subsidiary or at the time of acquisition by AMERCO or our
consolidated subsidiaries of any business entity then owning such fixed
assets, whether or not such existing Liens were given to secure the payment
of the purchase price or construction costs of the fixed assets to which
they attach, so long as Liens permitted by this subclause (b) were not
incurred, extended or renewed in contemplation of such acquisition or
construction, provided that any such Liens permitted by this clause (2)
shall attach solely to the property acquired, constructed, improved or
purchased;
(3) Liens for taxes, assessments or other governmental levies or
charges not yet due or which are subject to a good faith contest;
(4) Liens incidental to the conduct of AMERCO's and our subsidiaries'
businesses or their ownership of property and other assets not securing any
indebtedness for money borrowed and not otherwise incurred in connection
with the borrowing of money or obtaining of credit, and which do not in the
aggregate materially diminish the value of AMERCO's or our subsidiaries'
property or assets when taken as a whole, or materially impair the use
thereof in the operation of their businesses;
(5) Liens in respect of any interest or title of a lessor in any
property subject to a Capitalized Lease permitted under the covenant
described under "-- Limitation on Sale and Leaseback" below;
(6) Liens arising in respect of judgments against AMERCO, except for
any judgment in an amount in excess of $1,000,000 which is not discharged
or execution thereof stayed pending appeal within 45 days after entry
thereof;
(7) Liens in favor of AMERCO or any of our consolidated subsidiaries;
(8) Liens consisting of minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as to use of
real property, that are necessary for the conduct of the operations of
AMERCO and our subsidiaries or that customarily exist on properties of
corporations engaged in
S-10
<PAGE> 13
similar businesses and are similarly situated and that do not in any event
materially impair their use in the operations of AMERCO and our
subsidiaries; and
(9) Liens renewing, extending or refunding any Lien permitted by the
preceding clauses of this paragraph; provided, however, that the principal
amount of indebtedness for money borrowed secured by such Lien immediately
prior thereto is not increased and such Lien is not extended to any other
assets or property.
Notwithstanding the foregoing, AMERCO or any of our consolidated
subsidiaries may create or assume Liens, in addition to those otherwise
permitted by the preceding clauses of this paragraph, securing indebtedness for
money borrowed of AMERCO or any of our consolidated subsidiaries issued or
incurred after the issue date, provided that at the time of such issuance or
incurrence, the aggregate amount of all Secured Indebtedness and Attributable
Debt would not exceed 15% of Consolidated Net Tangible Assets.
In the event that any property of AMERCO or any of our consolidated
subsidiaries is subjected to a Lien not otherwise permitted by this paragraph,
AMERCO will make or cause to be made a provision whereby the notes will be
secured (together with other indebtedness for money borrowed then entitled
thereto and equal in rank to the notes), to the full extent permitted under
applicable law, equally and ratably with all other obligations secured thereby,
and in any case the notes shall (but only in such event) have the benefit, to
the full extent that the holders of the notes may be entitled thereto under
applicable law, of an equitable Lien on such property equally and ratably
securing the notes and such other obligations.
Limitation on Sale and Leaseback. AMERCO will not, and will not permit any
of our consolidated subsidiaries to, enter into any arrangement, directly or
indirectly, whereby AMERCO or such consolidated subsidiary shall, in one
transaction or a series of related transactions, (i) sell, transfer or otherwise
dispose of any property owned by AMERCO or any of our consolidated subsidiaries
and (ii) more than 120 days after the later of the date of initial acquisition
of such property or completion or occupancy thereof, as the case may be, by
AMERCO or such consolidated subsidiary, rent or lease, as lessee, such property
or substantially identical property or any material part thereof (a "Sale and
Leaseback Transaction"), provided that the foregoing restriction shall not apply
to any Sale and Leaseback Transaction if (a) immediately after the consummation
of such Sale and Leaseback Transaction and after giving effect thereto, no
Default or Event of Default shall exist and (b) any one of the following
conditions is satisfied:
(1) the lease concerned constitutes a Capitalized Lease and at the
time of entering into such Sale and Leaseback Transaction and after giving
effect thereto and to any Liens incurred pursuant to the covenant described
under "-- Limitation on Liens Securing Indebtedness" above, the aggregate
amount of all Secured Indebtedness and Attributable Debt would not exceed
15% of Consolidated Net Tangible Assets;
(2) the lease has a term which in the aggregate would not exceed 36
months (including any extensions or renewals thereof at the option of the
lessee); or
(3) the sale of such property is for cash consideration which equals
or exceeds the fair market value thereof (as determined in good faith by
AMERCO) and the net proceeds from such sale are applied, within 180 days of
the date of the sale thereof, to either (a) redemption or retirement of the
notes or (b) the payment (other than payments due at maturity or in
satisfaction of, or applied to, any mandatory or scheduled payment or
prepayment obligation) of indebtedness for money borrowed of AMERCO which
ranks, in right of payment, on a parity with or senior to the notes.
Restrictive Agreements. AMERCO will not and will not permit any of our
consolidated subsidiaries to enter into any indenture, agreement, instrument or
other arrangement which, directly or indirectly, prohibits or restrains, or has
the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the ability of any of our consolidated subsidiaries to make
loans or advances to AMERCO or to declare and pay dividends or make distribution
on shares of such consolidated subsidiary's capital stock (whether now or
hereafter outstanding); provided, however, that any agreement to subordinate
indebtedness for money borrowed owing from any of our consolidated subsidiaries
to
S-11
<PAGE> 14
AMERCO or owing between our consolidated subsidiaries pursuant to any Priority
Debt or to any guarantee of such indebtedness for money borrowed shall not be
deemed to violate this paragraph so long as any such agreement to subordinate
does not directly or indirectly prohibit or restrain the ability of any such
consolidated subsidiary to make loans or advances to AMERCO or to declare and
pay dividends or make distributions on shares of such consolidated subsidiary's
capital stock (whether now or hereafter outstanding).
EVENTS OF DEFAULT
The notes are subject to the Events of Default described under "Description
of Debt Securities -- Events of Default" in the accompanying prospectus and as
described in the following sentence. An event of default under the Supplemental
Indenture will occur upon the failure to perform the covenant of AMERCO in the
Supplemental Indenture described herein under "-- Purchase of the Notes at the
Option of the Holder" (including the failure to purchase the notes required to
be purchased following a Change in Control Purchase in accordance with the terms
of the Change in Control Notice and the Supplemental Indenture).
APPLICATION OF DEFEASANCE PROVISIONS
The notes are subject to defeasance and covenant defeasance as described
under "Description of Debt Securities -- Defeasance" in the accompanying
prospectus. The Supplemental Indenture will provide with respect to the notes
that AMERCO may omit to comply with the covenants described under "-- Purchase
of the Notes at the Option of the Holder," "-- Certain Covenants -- Limitation
on Liens Securing Indebtedness," "-- Certain Covenants -- Limitation on Sale and
Leaseback," and "-- Certain Covenants -- Restrictive Agreements" above, and that
violations of such covenants will not be deemed to be an Event of Default under
the Supplemental Indenture, the Senior Indenture and the notes to the extent
that the conditions described under "Description of Debt
Securities -- Defeasance" in the accompanying prospectus are met.
MODIFICATION AND WAIVER
The notes are subject to the provisions described under "Description of
Debt Securities -- Modification and Waiver" in the accompanying prospectus in
addition to the following provision. A modification or amendment to the
Supplemental Indenture may not waive AMERCO's obligation to make a Change in
Control Purchase without the written consent of the holders of at least
two-thirds in aggregate principal amount of the then outstanding notes.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants contained in the Supplemental Indenture. Reference is made to the
Senior Indenture and the Supplemental Indenture for the full definition of all
such terms as well as any other capitalized terms used herein for which no
definition is provided.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price of the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that redemption date.
"Attributable Debt" means indebtedness for money borrowed deemed to be
incurred in respect of a Sale and Leaseback Transaction and shall be, at the
date of determination, the present value (discounted at the actual rate of
interest implicit in such transaction, compounded annually), of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Leaseback Transaction, after excluding all
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water and utility rates and similar charges.
S-12
<PAGE> 15
"Capital Stock" means, with respect to any person, any and all shares or
other equivalents (however designated) of corporate stock, partnership
interests, or any other participation, right, warrant, option, or other interest
in the nature of an equity interest in such person, but excluding debt
securities convertible or exchangeable into such equity interest.
"Capitalized Lease" means any lease the obligation for Rentals with respect
to which is required to be capitalized on a consolidated balance sheet of the
lessee and its subsidiaries in accordance with United States generally accepted
accounting principles.
"Change in Control" means the occurrence of:
(i) any consolidation, share exchange or merger regarding AMERCO in which
AMERCO is not the continuing or surviving corporation or where our
Voting Stock would be converted into cash, securities or other property,
other than a merger in which the holders of our Voting Stock immediately
prior to the merger have the same or greater direct or indirect
proportionate ownership of the surviving corporation's Voting Stock
immediately after the merger as they had of our Voting Stock immediately
before the merger, or
(ii) any person or group (as either such term is used in Section 13(d) and
14(d) of the Exchange Act), including affiliates of AMERCO (but not
including AMERCO, our subsidiaries, employee stock ownership plans or
employee benefit plans of AMERCO or our subsidiaries, or Permitted
Persons), filing a Schedule 13D or 14D-1 (or any successor schedule,
form or report under the Exchange Act) disclosing that such a person has
become the beneficial owner (as defined in Rule 13d-2 and 13d-5 under
the Exchange Act), directly or indirectly, of 50% or more of the Voting
Stock.
"Change in Control Triggering Event" means the occurrence of both a Change
in Control and a Rating Decline with respect to the notes.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the notes to be redeemed that would be utilized, at the time of a
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the notes.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest Reference Treasury Dealer
Quotation, or (ii) if the trustee obtains fewer than three Reference Treasury
Dealer Quotations, the average of the quotations.
"Consolidated Net Tangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of AMERCO and our
consolidated subsidiaries (less depreciation, depletion and other properly
deductible valuation reserves) after deducting Intangibles.
"consolidated subsidiary" means any subsidiary of a person or of any
consolidated subsidiary which is consolidated with such person for financial
reporting purposes in accordance with United States generally accepted
accounting principles.
"indebtedness for money borrowed," when used with respect to AMERCO or any
of our subsidiaries, means any obligation of, or any obligation guaranteed by,
AMERCO or any of our subsidiaries for the repayment of borrowed money, whether
or not evidenced by bonds, debentures, notes or other written instruments, and
any deferred obligation of, or any such obligation guaranteed by, AMERCO for the
payment of the purchase price of property or assets.
"Intellectual Properties" means all material patents, patent applications,
copyrights, copyright applications, trade secrets, trade names and trademarks,
technologies, methods, processes or other proprietary properties or information
which are used by AMERCO and our consolidated subsidiaries in the conduct of
their business and are either owned by them or are used, employed or practiced
by them under valid and existing licenses, grants, "shop rights," or other
rights.
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<PAGE> 16
"Intangibles" means all Intellectual Properties and all goodwill, patents,
trade names, trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, deferred assets
(other than prepaid insurance, prepaid taxes, prepaid advertising, prepaid
licensing and other similar expenses prepaid in the ordinary course of
business), amounts invested in or advanced to or equity in AMERCO's subsidiaries
other than consolidated subsidiaries less any writedowns thereof, the excess of
cost of shares acquired over book value of related assets, any increase in the
value of a fixed asset arising from a reappraisal, revaluation or write-up
thereof, and such other assets as are properly classified as "intangible assets"
in accordance with United States generally accepted accounting principles.
"Investment Grade Rating" means a rating equal to or higher than BBB- (or
the equivalent) by Standard & Poor's Rating Group (or any successor to the
rating agency business thereof), BBB- (or the equivalent) by Fitch IBCA, Inc.
(or any successor to the rating agency business thereof), and BBB- (or the
equivalent) by Duff & Phelps Credit Rating Co. (or any successor to the rating
agency business thereof).
"issue date" means the date of issuance of the notes under the Supplemental
Indenture and the Senior Indenture.
"Lien" means any interest in property securing an obligation owed to, or a
claim by, a person other than the owner of the property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
bankers' liens, setoffs and similar arrangements, leases and other title
exceptions and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all similar
arrangements) affecting property. For the purposes hereunder, AMERCO or any of
our consolidated subsidiaries shall be deemed to be the owner of any property
which it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the property
has been retained by or vested in some other person for security purposes and
such retention or vesting shall constitute a Lien.
"Permitted Persons" means (i) Edward J. Shoen, Mark V. Shoen, James P.
Shoen, Paul F. Shoen, Sophia M. Shoen and the spouse and lineal descendants of
each such individual, the spouses of each such lineal descendants and the lineal
descendants of such spouses, (ii) any trusts for the primary benefit of, the
executor or administrator of the estate of, or other legal representative of,
any of the individuals referred to in the foregoing clause (i), and (iii) any
corporation with respect to which all the Voting Stock thereof is, directly or
indirectly, owned by any of the individuals referred to in the preceding clause
(i).
"Priority Debt" means (i) indebtedness for money borrowed of any of
AMERCO's consolidated subsidiaries, except indebtedness for money borrowed
issued to and held by AMERCO or any or our wholly-owned consolidated
subsidiaries, and (but without duplication) (ii) Secured Indebtedness.
"Quotation Agent" means the Reference Treasury Dealer appointed by us.
"Rating Agencies" means Standard & Poor's Rating Group, Fitch IBCA, Inc.,
and Duff & Phelps Credit Rating Co. or any successor to the respective rating
agency businesses thereof.
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
Change in Control and (ii) public notice of the occurrence of a Change in
Control or of the intention of AMERCO to effect a Change in Control.
"Rating Decline" means, with the respect to the notes, the occurrence of
the following on, or within 90 days after, the date of public notice of the
occurrence of a Change in Control or of the intention by AMERCO to effect a
Change in Control (which period shall be extended so long as the rating of such
notes is under publicly announced consideration for possible downgrade by any of
the Rating Agencies): (a) in the event the notes were assigned an Investment
Grade Rating by at least two of the three Rating Agencies on the Rating Date,
the rating of the notes by both Standard & Poor's Rating Group and Fitch
S-14
<PAGE> 17
IBCA, Inc. shall decrease below an Investment Grade Rating; or (b) in the event
the notes were rated below an Investment Grade Rating by at least two of the
three Rating Agencies on the Rating Date, the rating of the notes by either
Standard & Poor's Rating Group or Fitch IBCA, Inc. shall decrease by one or more
gradations (including gradations within rating categories as well as between
rating categories).
"Reference Treasury Dealer" means (i) each of NationsBanc Montgomery
Securities LLC, Morgan Stanley & Co. Incorporated and their respective
successors; however, if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), we
will substitute another Primary Treasury Dealer; and (ii) any other Primary
Treasury Dealer selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
AMERCO, of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
trustee by the Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third business day preceding the redemption date.
"Rentals" means and includes, as of the date of any determination thereof,
all fixed payments (including as such all payments which the lessee is obligated
to make to the lessor on termination of the lease or surrender of the property)
payable by AMERCO or any of our consolidated subsidiaries, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by AMERCO or any of our consolidated
subsidiaries (whether or not designated as rents or additional rents) on account
of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Secured Indebtedness" means any indebtedness for money borrowed, whether
of AMERCO or any of our consolidated subsidiaries, secured by any Lien on any
property of AMERCO or any of our consolidated subsidiaries.
"subsidiary" means a person more than 50% of the outstanding Voting Stock
of which is owned, directly or indirectly, by such person or by one or more
other subsidiaries, or by such person and one or more other subsidiaries of such
person.
"Voting Stock" of a person means all classes of Capital Stock of such
person then outstanding and normally entitled to vote in the election of
directors (or persons performing similar functions) or to direct the business
and affairs of the issuer of such Capital Stock in the absence of contingencies.
"wholly-owned consolidated subsidiary" means any consolidated subsidiary
all of the outstanding Capital Stock of which (except for directors' qualifying
shares to the extent required by applicable law) is owned by a person and/or its
wholly-owned consolidated subsidiaries.
S-15
<PAGE> 18
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement,
dated March 26, 1999, among us and the underwriters named below, we have agreed
to sell to each of the underwriters and each of the underwriters severally has
agreed to purchase from us the principal amount of the notes set forth opposite
its name below. The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions and that the underwriters will be
obligated to purchase all of the notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES
- ------------ ----------------
<S> <C>
NationsBanc Montgomery Securities LLC....................... $105,000,000
Morgan Stanley & Co. Incorporated........................... 45,000,000
------------
Total............................................. $150,000,000
============
</TABLE>
The underwriters propose to offer the notes to the public at the public
offering price set forth on the cover page of this prospectus supplement and to
dealers at that price less a concession of no more than .30% of the principal
amount of the notes. The underwriters may allow, and the dealers may reallow, a
discount of no more than .20% of the principal amount of the notes to other
dealers. The public offering price, concession and discount may be changed after
the offering to the public of the notes.
The notes are a new issue of securities with no established trading market.
We do not intend to apply for listing of the notes on any national securities
exchange or for quotation of the notes on any automated dealer quotation system.
The underwriters have advised us that they intend to make a market in the notes
after the offering, although they are under no obligation to do so. The
underwriters may discontinue any market-making activities at any time without
any notice. We can give no assurance as to the liquidity of the trading market
for the notes or that a public trading market for the notes will develop. If no
active public trading market develops, the market price and liquidity of the
notes may be adversely affected. If the notes are traded, they may trade at a
discount from their initial offering price, depending on factors such as
prevailing interest rates, the market for similar securities, the performance of
our company as well as other factors not listed here.
We have agreed to indemnify the underwriters against, or to contribute to
payments that the underwriters may be required to make with respect to, certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The underwriters, as well as dealers and agents, may purchase and sell
notes in the open market. These transactions may include stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of bids and
purchases made to prevent or slow a decline in the market price of the notes.
Syndicate short positions arise when the underwriters or agents sell more notes
than we are required to sell to them in the offering. The underwriters may also
impose penalty bids whereby the underwriting syndicate may reclaim selling
concessions allowed either syndicate members or broker dealers who sell notes in
the offering for their own account if the syndicate repurchases the notes in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the notes, which may be higher as a
result of these activities than it might otherwise be in the open market. These
activities, if commenced, may be discontinued at any time without notice.
We and the underwriters make no representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the notes. In addition, we and the underwriters make no
representation that the underwriters will engage in those types of transactions
or that those transactions, once commenced, will not be discontinued without
notice.
Each of the underwriters, and certain of their affiliates, have provided,
and may continue to provide, investment banking, financial advisory, commercial
banking and other services to us and our affiliates and have received, and may
continue to receive, customary fees in connection with those services.
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<PAGE> 19
NationsBank, N.A., an affiliate of NationsBanc Montgomery Securities LLC,
is an agent and a lender under AMERCO's $400 million revolving credit facility
dated as of June 30, 1997. Bank of America National Trust and Savings
Association, also an affiliate of NationsBanc Montgomery Securities LLC, is a
lender under the revolving credit facility. Each of the above-mentioned parties
has received and will receive customary fees under the revolving credit
facility. Additionally, NationsBank, N.A. and Bank of America National Trust and
Savings Association will receive a proportionate share of the repayment by
AMERCO of amounts outstanding under the revolving credit facility. See "Use of
Proceeds."
Under Conduct Rule 2710(c)(8) ("Rule 2710(c)(8)") of the National
Association of Security Dealers, Inc. ("NASD"), where more than 10% of the net
offering proceeds, not including underwriting compensation, are intended to be
paid to members participating in the distribution of the offering of notes or
associated or affiliated persons of such members, such offering must be
conducted in accordance with the applicable provisions of Rule 2710(c)(8). The
net proceeds from the offering of the notes will be used to reduce borrowings
under the revolving credit facility. This may result in more than 10% of the net
proceeds of the offering of the notes being paid to NASD members or associated
or affiliated persons of such members. Consequently, the offering of the notes
is being conducted in accordance with the applicable provisions of Rule
2710(c)(8).
It is expected that delivery of the notes will be made against payment
therefor on or about the date specified in the last paragraph under "The
Offering:" on the cover page of this prospectus, which is expected to be the
sixth business day following the date of pricing of the notes. Pursuant to Rule
15c6-1 under the Exchange Act, trades in the secondary market generally are
required to settle in three business days unless the parties to any such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade notes on
the date of pricing or the next two business days will be required, by virtue of
the fact that the notes initially will settle in T+6, to specify an alternate
settlement cycle at the time of any such trade to prevent a failed settlement.
Purchasers of notes who wish to trade notes on the date of pricing or the next
two business days should consult their own advisor.
We estimate that AMERCO's share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$140,000.
LEGAL MATTERS
Our counsel, Lionel, Sawyer & Collins, Las Vegas, Nevada, will pass upon
the validity of the notes and will rely upon Milbank, Tweed, Hadley & McCloy
LLP, New York, New York with respect to matters of the law of the State of New
York. Milbank, Tweed, Hadley & McCloy LLP, New York, New York, will pass upon
the validity of the notes for the underwriters and will rely upon Lionel, Sawyer
& Collins, Las Vegas, Nevada with respect to matters of the law of the State of
Nevada.
S-17
<PAGE> 20
Prospectus
[UHAUL LOGO]
AMERCO
$500,000,000
Debt Securities
AMERCO
1325 Airmotive Way, Suite 100
Reno, Nevada 89502-3239
(775) 688-6300
We are a holding company for U-Haul International, Inc., Republic Western
Insurance Company, Oxford Life Insurance Company, and Amerco Real Estate
Company. U-Haul comprises greater than 80% of our total revenue and is our most
notable business. The trading symbol for our common stock on the NASDAQ is
"UHAL." We do not expect any of these debt securities to officially trade in any
public market.
* We may use this prospectus from time to time to offer senior and
subordinated unsecured debt securities in one or more series.
* The debt securities will be issued under the terms of two indentures
and applicable supplemental indentures, which are described in this
prospectus.
* Specific terms of these debt securities will be set forth in a
supplement to this prospectus.
* The total of all debt securities offered will not exceed $500,000,000.
* We may sell debt securities directly to purchasers, through
underwriters, dealers or agents or through any combination of these
methods.
* A supplement to this prospectus will name any underwriters, dealers or
agents involved in the sale of our debt securities and describe their
compensation.
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This investment involves a high degree of risk. Before making an investment in
our debt securities, you should carefully consider certain risks described in
"Risk Factors" beginning on page 7.
This prospectus may not be used to consummate a sale of debt securities unless
accompanied by a prospectus supplement applicable to such debt securities.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
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March 16, 1999
<PAGE> 21
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may, over the next two years, use the registration
statement and the shelf process to sell any combination of the debt securities
described in this prospectus in one or more offerings up to a total dollar
amount of $500,000,000. This prospectus provides you with a general description
of the debt securities we may offer. Each time we sell debt securities, we will
provide a prospectus supplement that will contain specific information about the
terms of that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. It is important for you to carefully
read both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information" in
making your investment decision.
For more detail, you should read the exhibits filed with our registration
statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. Our SEC filings are available to the public over the internet at the SEC's
web site at http://www.sec.gov. You may also read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made by us with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until we or the underwriters sell all of the securities that we have
registered.
* Annual Report on Form 10-K for the fiscal year ended March 31, 1998;
and
* Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998,
September 30, 1998, and December 31, 1998.
You may request a copy of these filings at no cost by writing or telephoning us
at the following address:
AMERCO -- Investor Relations
1325 Airmotive Way, Suite 100
Reno, Nevada 89502-3239
telephone: (775) 688-6300
Additionally, our summary quarterly financial reports can be found on our home
page on the Internet at: http://www.uhaul.com. Such information, however, will
not be deemed to be incorporated by reference in this prospectus.
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You should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone else
to provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus or any prospectus supplement is accurate
as of any date other than the date on the front of those documents.
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SPECIAL NOTE OF CAUTION REGARDING
FORWARD-LOOKING STATEMENTS
Certain statements in (a) this prospectus under the caption "Risk Factors," (b)
any applicable prospectus supplement and (c) the documents incorporated by
reference into this prospectus may constitute "forward-looking statements"
within the meaning of federal securities laws. Forward-looking statements are
based on our management's beliefs, assumptions, and expectations of our future
economic performance, taking into account the information currently available to
them. These statements are not statements of historical fact. Forward-looking
statements involve risks and uncertainties that may cause our actual results,
performance or financial condition to be materially different from the
expectations of future results, performance or financial condition we express or
imply in any forward-looking statements. Some of the important factors that
could cause our actual results, performance or financial condition to differ
materially from our expectations are:
* Fluctuations in our costs to maintain and update our fleet and
facilities;
* Changes in government regulations, particularly environmental
regulations;
* Changes in demand for our products;
* Changes in the general domestic economy;
* Degree and nature of our competition; and
* Other factors described in this prospectus, any prospectus supplement
or the documents we file with the SEC and incorporate by reference
into this prospectus.
When used in our documents or oral presentations, the words "anticipate,"
"estimate," "expect," "objective," "projection," "forecast," "goal" or similar
words are intended to identify forward-looking statements. We qualify any such
forward-looking statements entirely by these cautionary factors.
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ABOUT AMERCO
GENERAL INFORMATION
AMERCO owns all of the stock of our principal subsidiary, U-Haul International,
Inc. U-Haul rental operations represented over 80% of our total revenue for each
of the past five (5) fiscal years ended March 31, 1998. We also own all the
stock of Republic Western Insurance Company, Oxford Life Insurance Company, and
Amerco Real Estate Company. Throughout this prospectus, unless otherwise
indicated, AMERCO and references to "we," "our," "ours" and "us" includes all of
our subsidiaries. Our principal executive offices are located at 1325 Airmotive
Way, Suite 100, Reno, Nevada 89502, and our telephone number is (775) 688-6300.
U-HAUL OPERATIONS
* U-Move Operations
Founded in 1945, U-Haul is primarily engaged, through its subsidiaries, in the
rental of trucks, automobile-type trailers, and support rental items to the
do-it-yourself moving customer which include the sale of moving items or moving
materials (such as boxes, tape, and packaging materials). Our do-it-yourself
moving business operates under the U-Haul name through an extensive and
geographically diverse distribution network of approximately 1,100 company-
owned U-Haul centers and approximately 15,000 independent dealers throughout the
United States and Canada. We believe that we have more moving equipment rental
locations than our two largest competitors combined. The U-Haul rental equipment
fleet consists of 92,900 trucks, 79,600 trailers, and 18,300 tow dollies.
Additionally, U-Haul sells related products (such as boxes, tape, and packaging
materials).
* Self-Storage Rental Operations
U-Haul entered the self-storage business in 1974 and offers for rent more than
27.2 million square feet of self-storage space through over 800 company-owned or
managed storage locations. We believe we are the second largest self-storage
operator (in terms of square feet) in the industry. We believe our self-storage
operations are complementary to the do-it-yourself moving business. All of our
self-storage space is located at or near one or more U-Haul centers or
independent U-Haul dealers.
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<PAGE> 25
INSURANCE OPERATIONS
* Republic Western
Republic Western originates and reinsures property and casualty type insurance
products for independent third parties, U-Haul customers, and U-Haul. Republic
Western's principal strategy is to capitalize on its knowledge of insurance
products aimed at the moving and rental markets. Approximately 29.8% of Republic
Western's written premiums relate to insurance underwriting activities involving
affiliates of AMERCO. Approximately 90.8% of Republic Western's invested assets
are in investment grade (NAIC-2 or greater) fixed income securities. Republic
Western is rated "A+-VIII" by A.M. Best.
* Oxford
Oxford primarily reinsures life, health, and annuity insurance products and
administers our self-insured employee health plan. Approximately 2.9% of
Oxford's premium revenues are from business with affiliates of AMERCO.
Approximately 91.4% of Oxford's invested assets are in investment grade (NAIC-2
or greater) fixed income securities. Oxford is rated "A-VII" by A.M. Best.
REAL ESTATE OPERATIONS
* Amerco Real Estate
Amerco Real Estate owns or actively manages over 1,150 properties throughout the
United States and Canada. In addition to its U-Haul operations, Amerco Real
Estate actively seeks to lease or dispose of our surplus properties.
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The following chart represents the corporate structure of the major operating
subsidiaries of AMERCO:
Corporate Structure Flow Chart of Amerco
THE OFFERING
We may offer and sell from time to time, in one or more series, unsecured senior
or subordinated debt securities, which may consist of notes, debentures or other
evidences of indebtedness.
The total initial offering prices of the debt securities we may offer and sell
pursuant to this prospectus and supplements to it will not be greater than
$500,000,000 (or the equivalent amount in a foreign currency or currency unit at
the time of sale). We will offer these securities in amounts, at prices and on
terms that we determine in light of market conditions at the time of sale and
specify in a prospectus supplement.
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<PAGE> 27
RISK FACTORS
* HIGHLY COMPETITIVE INDUSTRY
The truck rental industry is highly competitive and includes a number of
significant national and hundreds of regional and local competitors. Competition
is generally based on price, product quality, convenience, availability, brand
name recognition and service. Competition could adversely affect AMERCO's
operating results by forcing us to reduce prices or delay price increases.
* MANAGEMENT'S DISCRETION AS TO USE OF PROCEEDS
We will use the net proceeds from the sale of the debt securities in the manner
set forth in the prospectus supplement relating to each offering of the debt
securities. Consequently, our Board of Directors and management will have broad
discretion in allocating the net proceeds of this offering.
* CONTROL BY CERTAIN EXISTING STOCKHOLDERS
Edward J. Shoen, Chairman of the Board and President of AMERCO, James P. Shoen,
Vice President and a Director of AMERCO, and Mark V. Shoen, President of U-Haul
Phoenix Operations collectively own 9,205,476 shares (approximately 40.1%) of
the outstanding common stock of AMERCO. Accordingly, Edward J. Shoen, Mark V.
Shoen, and James P. Shoen will be in a position to continue to influence the
election of the members of the Board of Directors and decisions requiring
stockholder approval. In addition, 2,849,124 shares (approximately 12.6%),
including shares allocated to employees and unallocated shares, are held by the
AMERCO Employee Savings and Employee Stock Ownership Trust.
* ENVIRONMENTAL MATTERS
Compliance with environmental requirements of federal, state and local
governments significantly affects AMERCO's business. Among other things, these
requirements regulate the discharge of materials into the water, air and land
and govern the use and disposal of hazardous substances. Under environmental
laws, AMERCO can be held strictly liable for hazardous substances that are found
on real property AMERCO has owned or operated. AMERCO is aware of issues
regarding hazardous substances on some of our real estate and AMERCO has put in
place a remedial plan at each site where we believe such a plan is necessary.
AMERCO regularly makes capital and operating expenditures to stay in compliance
with environmental laws. In particular, AMERCO has managed a testing and removal
program since 1988 for our underground storage tanks. Under this program, AMERCO
has removed over 3,000 tanks at a total cost of $39.0 million since April 1988.
As of December 31, 1998, AMERCO has twelve known sites containing thirteen known
underground storage tanks. Despite these compliance efforts, risk of
environmental liability is part of the nature of our business. AMERCO cannot
assure you that environmental liabilities, including compliance and remediation
costs, will not have a material adverse effect on AMERCO in the future. In
addition, future events may lead to additional compliance or other costs that
could have a material adverse effect on AMERCO. Such future events could include
changes in, or new interpretations of, existing laws or enforcement policies.
For more information regarding AMERCO's environmental matters,
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<PAGE> 28
see "Item 1. Business -- Moving and Storage Operations -- Environmental Matters"
in AMERCO's Form 10-K.
* YEAR 2000 DISCLOSURE
AMERCO is and has been working since 1997 to identify and complete the changes
necessary to our existing computerized business systems to make these systems
compliant for Year 2000 processing. The Year 2000 processing problem is caused
by currently installed computer systems and software products, including several
used by AMERCO, being coded to accept only the last two digit entries in the
date code field instead of four digits to indicate the year. Such programs may
interpret the year 2000 to mean 1900 instead, producing erroneous information or
date-related computer failures.
AMERCO's date reliance functions related to the Year 2000 and beyond, such as
rental transaction processing and financial systems, may be adversely affected
unless these computer systems are or become Year 2000 compliant. Replacing,
upgrading or modifying key financial systems has been on-going in the normal
course of business. AMERCO is utilizing both internal and external resources to
identify, correct, reprogram and test our systems for Year 2000 compliance. In
particular, AMERCO has an outside consulting firm on-site currently making the
Year 2000 compliance related modifications to existing systems. The assessment
phase is complete for information technology. AMERCO's internal information
technology conversion phase is underway, with the testing phase going on at the
same time.
AMERCO is also assessing our non-information technology items for Year 2000
compliance, such as rental vehicles and storage facilities security systems.
AMERCO is communicating with our major business partners to determine the
efforts being made on their part for compliance. Critical vendors with
electronic data interchange will be scheduled for testing between January and
March of 1999, with other vendor testing to be scheduled during the remainder of
the calendar year 1999. There can be no assurance AMERCO will not be adversely
affected by the failure of others to become Year 2000 compliant. For example,
AMERCO may be affected by, among other things, the failure of inventory
suppliers, credit card processors, security companies or other vendors and
service providers to become Year 2000 compliant.
AMERCO expects to be Year 2000 compliant by the fall of calendar year 1999.
Initially, the budget was $2.0 million; as the conversion process continues, we
now anticipate an additional $0.8 million may be incurred. Through December 31,
1998, $1.4 million has been incurred. AMERCO is accelerating the replacement of
our payroll system due to year 2000 non-compliance at an estimated cost of $0.3
million to be incurred starting in June 1999. AMERCO has not deferred any major
computer programming or update projects due to Year 2000 efforts. Although
AMERCO believes we will achieve compliance on a timely basis, no assurance can
be given that AMERCO's computer systems will be Year 2000 compliant by the fall
of 1999 or otherwise in a timely manner or that AMERCO will not incur
significant additional costs pursuing Year 2000 compliance. If the appropriate
modifications are not made, or are not timely, the Year 2000 problem may have a
material adverse effect on AMERCO.
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<PAGE> 29
AMERCO considers our most reasonably likely worst case scenario to be if a
business partner is not Year 2000 compliant. AMERCO is in the process of
developing and refining contingency plans to be used if a business partner is
not compliant. The contingency plans will include processing of rental
transactions, payments to employees and vendors, licensing of equipment,
preparation of financial statements and the movement of funds. It is anticipated
that the contingency plans will be completed by the end of March of 1999, with
refinement continuing until the year 2000.
Despite AMERCO's efforts to date, there can be no assurance that the Year 2000
problem will not have a material adverse effect on AMERCO in the future.
USE OF PROCEEDS
The use of proceeds from the sale of the debt securities will be set forth in a
prospectus supplement relating to each offering of debt securities.
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<PAGE> 30
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows AMERCO's ratio of earnings to fixed charges for the
periods indicated. For purposes of computing the ratio of earnings to fixed
charges, "earnings" consists of pretax earnings from operations plus total fixed
charges excluding interest capitalized during the period, and "fixed charges"
consists of interest expense, capitalized interest, amortization of debt expense
and discounts, and one-third of the our annual rental expense (which we believe
is a reasonable approximation of the interest factor of these rentals). The
ratio for the nine months ended on December 31, 1998 may be different from the
ratio for fiscal 1999 because, among other reasons, U-Haul rental operations are
seasonal and proportionally more of our earnings are generated in the first and
second quarters of each fiscal year.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
DECEMBER 31, FISCAL YEAR ENDED MARCH 31,
- ------------ --------------------------------
1998 1998 1997 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.36 1.66 1.74 2.01 1.99 1.67
</TABLE>
For more information on AMERCO's ratio of earnings to fixed charges, see Exhibit
12 to the registration statement and the section called "Where You Can Find More
Information."
DESCRIPTION OF DEBT SECURITIES
The following is a description of certain general terms of the debt securities
to which any prospectus supplement may relate. The particular terms of the debt
securities, including the senior securities and the subordinated securities,
offered by any prospectus supplement (the "Offered Securities") and the extent,
if any, to which such general provisions may apply to the debt securities so
offered will be described in the prospectus supplement relating to such Offered
Securities.
The senior securities are to be issued under an indenture (the "Senior
Indenture"), between AMERCO and The Bank of New York, as trustee (the "Senior
Trustee"). The subordinated securities are to be issued under an Indenture (the
"Subordinated Indenture") between AMERCO and The Bank of New York, as trustee
(the "Subordinated Trustee," together with the Senior Trustee, the "Trustees").
The Senior Indenture and the Subordinated Indenture (collectively, the
"Indentures") are exhibits to the registration statement. The following
summaries of certain provisions of the Indentures do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indentures, including the definitions therein of certain
terms. Because this is a summary, it does not contain all the information that
may be important to you. You should read each of the applicable Indentures in
their entirety, including the definitions of certain terms, and the applicable
prospectus supplement before you make any investment decision. Wherever
particular provisions or defined terms of the Indentures are referred to, such
provisions or defined terms are incorporated herein by reference. Certain
defined terms in the Indentures are capitalized herein.
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<PAGE> 31
GENERAL
Unless otherwise indicated in the prospectus supplement relating to Offered
Securities, the debt securities will be unsecured obligations of AMERCO.
The Indentures do not limit the amount of Offered Securities that may be issued
thereunder and provide that the Offered Securities may be issued thereunder from
time to time in one or more series. All Offered Securities of one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened under the applicable Indenture, without the consent of any holder, for
issuances of additional Offered Securities of such series. The senior securities
will rank pari passu with all other unsecured and unsubordinated indebtedness of
AMERCO. The subordinated securities will rank pari passu with other subordinated
indebtedness of AMERCO and, together with such subordinated indebtedness, will
be subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of AMERCO as described under "Subordinated Securities" below.
Reference is made to the prospectus supplement relating to the Offered
Securities for the following terms, where applicable, of the Offered Securities:
* the title of the Offered Securities;
* any limit on the aggregate principal amount of the Offered
Securities;
* the ranking of such Offered Securities as senior securities or
subordinated securities;
* the person to whom any interest on any Offered Security will be
payable, if other than the person in whose name such Offered
Security (or one or more predecessor debt securities) is
registered at the close of business on the regular record date
for such interest;
* the date or dates on which the Offered Securities will mature;
* the rate or rates (which may be fixed or variable) at which the
Offered Securities will bear interest, if any, and the date or
dates from which such interest will accrue;
* the dates on which such interest, if any, will be payable and
the regular record dates for such interest payment dates;
* the place or places where the principal of (and premium, if
any) and interest on the Offered Securities shall be payable,
where any Offered Securities may be surrendered for
registration of transfer or exchange and where notices to or
demand upon AMERCO may be delivered;
* the period or periods within which, the price or prices at
which, and the terms and conditions upon which, the Offered
Securities may be redeemed in whole or in part, at the option
of AMERCO;
* the mandatory or optional redemption provisions applicable to
the Offered Securities;
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* the obligation, if any, of AMERCO to redeem or purchase such
Offered Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof and the period
or periods within which, the price or prices at which, and the
terms and conditions upon which, such Offered Securities shall
be redeemed or purchased, in whole or in part, pursuant to such
obligation;
* the denominations in which such Offered Securities will be
issuable, if other than denominations of $1,000 and any
integral multiples thereof;
* the portion of the principal amount of the Offered Securities,
if other than the entire principal amount thereof, payable upon
acceleration of maturity thereof;
* any additional restrictive covenants under the applicable
Indenture;
* the right of AMERCO to defease the Offered Securities or
certain restrictive covenants and certain Events of Default
under the Indentures;
* the currency or currencies in which payment of principal and
premium, if any, and interest on the Offered Securities will be
payable, if other than United States dollars;
* if the principal of and premium, if any, or interest, if any,
on such Offered Securities is to be payable, at the election of
AMERCO or a holder thereof, in a currency or currencies other
than that in which such Offered Securities are stated to be
payable, the currency or currencies in which payment of the
principal of and premium, if any, or interest, if any, on such
Offered Securities as to which such election is made will be
payable and the period or periods within which, and the terms
and conditions upon which, such election may be made;
* any index used to determine the amount of payments of principal
of and premium, if any, and interest, if any, on the Offered
Securities;
* if the Offered Securities will be issuable only in the form of
a global note as described under "Book-Entry Securities," the
Depository or its nominee with respect to the Offered
Securities, and the circumstances under which the global note
may be registered for transfer or exchange in the name of a
person other than the Depository or its nominee;
* any additional Events of Default under the applicable
Indenture; and
* any other terms of the Offered Securities.
If the principal of and premium, if any, or any interest on Offered Securities
of any series are payable in a foreign or composite currency, the restrictions,
elections, federal income tax consequences, specific terms and other information
with respect to such Offered Securities and such currency will be described in
the prospectus supplement relating thereto.
Unless otherwise indicated in the prospectus supplement relating to Offered
Securities, principal of and premium, if any, and interest, if any, on the
Offered Securities will be
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payable, and the Offered Securities will be exchangeable and transfers thereof
will be registrable, at the office of the applicable Trustee at 101 Barclay
Street, Floor 21 West, New York, New York, 10286, provided that, at the option
of AMERCO, payment of interest may be made by:
* wire transfer on the date of payment in immediately available
federal funds or next day funds to an account specified by
written notice to the applicable Trustee from any holder of
Offered Securities;
* any similar manner that such holder may designate in writing to
the applicable Trustee; or
* by check mailed to the address of the person entitled thereto
as it appears in the security register.
Any payment of principal and premium, if any, and interest, if any, required to
be made on an interest payment date, redemption date, or at maturity that is not
a business day need not be made on such day, but may be made on the next
succeeding business day with the same force and effect as if made on the
interest payment date, redemption date, or at maturity, as the case may be, and
no interest shall accrue for the period from and after such interest payment
date, redemption date, or maturity.
Unless otherwise indicated in the prospectus supplement relating to Offered
Securities, the debt securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any transfer or exchange of Offered Securities,
but AMERCO may require payment of a sum sufficient to cover any tax or other
government charge payable in connection therewith.
Offered Securities may be issued under the Indentures as original issue discount
securities to be offered and sold at a substantial discount from their stated
principal amount. In addition, under United States treasury regulations, it is
possible that Offered Securities that are offered and sold at their stated
principal amount would, under certain circumstances, be treated as issued at an
original issue discount for federal income tax purposes. Federal income tax
consequences and other special considerations applicable to any such original
issue discount securities (or other debt securities treated as issued at an
original issue discount) and to "investment units" will be described in the
prospectus supplement relating thereto. An "original issue discount security"
means any security that provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the maturity
thereof upon the occurrence of an Event of Default and the continuation thereof.
BOOK-ENTRY SYSTEM
The debt securities will be represented by one or more permanent global notes
deposited with, or on behalf of, The Depository Trust Company, as Depository
under the Indentures
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<PAGE> 34
and the related supplemental indentures (the "Depository"), and registered in
the name of the Depository's nominee. Except as set forth below:
* owners of beneficial interests in a global note will not be
entitled to have debt securities represented by such global
note registered in their names, will not receive or be entitled
to receive physical delivery of notes in definitive form and
will not be considered the owners or holders thereof under the
Indentures and the related Supplemental Indentures; and
* each global note may be transferred, in whole and not in part,
only to another nominee of the Depository or to a successor of
the Depository or its nominee.
Accordingly, beneficial interests in the debt securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository and its participants. The laws of some states require certain
purchasers of securities to take physical delivery thereof in definitive form.
The depository arrangements described above and such laws may impair the ability
to own or transfer beneficial interests in a global note.
Owners of beneficial interests in any global note will not be entitled to
receive debt securities in definitive form and will not be considered holders of
debt securities unless:
* the Depository notifies AMERCO that it is unwilling or unable
to continue as Depository for such global note or if at any
time the Depository ceases to be a clearing agency registered
under the Exchange Act;
* AMERCO executes and delivers to the applicable Trustee a
company order that such global note shall be so exchangeable;
or
* there shall have occurred and be continuing an Event of Default
or an event which, with the giving of notice or lapse of time,
or both, would constitute an Event of Default with respect to
the debt securities (a "Default").
In such circumstances, upon surrender by the Depository or a successor
depository of any global note, debt securities in definitive form will be issued
to each person that the Depository or a successor depository identifies as the
beneficial owner of the related debt securities. Upon such issuance, the
applicable Trustee is required to register such debt securities in the name of,
and cause such debt securities to be delivered to, such person or persons (or
nominees thereof). Such debt securities would be issued in fully registered form
without coupons, in denominations of $1,000 and integral multiples thereof.
The Depository is a limited-purpose trust company organized under the laws of
the State of New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions among its participants
in such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depository's direct participants include securities brokers
and dealers, banks, trust companies, clearing corporations, and certain other
organizations, some of whom (and/or their representatives) own the Depository.
Access to the Depository's book-entry system is also available to others known
as indirect participants, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship
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<PAGE> 35
with a participant, either directly or indirectly. The Depository agrees with
and represents to its participants that it will administer its book-entry system
in accordance with its rules and by-laws and requirements of law.
Principal and interest payments on debt securities registered in the name of or
held by the Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the global note
representing such debt securities. Under the terms of the Indentures and the
related Supplemental Indentures, AMERCO and the applicable Trustee will treat
the persons in whose names the debt securities are registered as the holders of
such debt securities for the purpose of receiving payment of principal and
interest on such debt securities and for all other purposes whatsoever.
Therefore, none of AMERCO, the Trustees or any paying agent has any direct
responsibility or liability for the payment of principal of or interest on the
debt securities to owners of beneficial interests in any global note. The
Depository has advised AMERCO and the Trustees that its current practice is to
credit the accounts of participants with payments of principal or interest on
the date payable in amounts proportionate to their respective holdings in
principal amount of beneficial interests in a global note as shown in the
records of the Depository, unless the Depository has reason to believe that it
will not receive payment on such date. The Depository's current practice is to
credit such accounts, as to interest, in next-day funds and, as to principal, in
same-day funds. Payments by participants and indirect participants to owners of
beneficial interests in a global note will be governed by standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name" and will be
the responsibility of the participants and indirect participants.
The Depository has advised AMERCO that it will take any action permitted to be
taken by an owner or holder of debt securities only at the direction of one or
more participants to whose account with the Depository such holder's debt
securities are credited. Additionally, the Depository has advised AMERCO that it
will take such actions with respect to any percentage of the beneficial interest
of holders who hold debt securities through participants only at the direction
of and on behalf of participants whose account holders include undivided
interests that satisfy any such percentage. The Depository may take conflicting
actions with respect to other undivided interests to the extent that such
actions are taken on behalf of participants whose account holders include such
undivided interests.
SENIOR SECURITIES
Payment of the principal of, premium, if any, and interest on senior securities
issued under the Senior Indenture will rank pari passu with all other unsecured
and unsubordinated indebtedness of AMERCO.
SUBORDINATED SECURITIES
Payment of the principal of, premium, if any, and interest on subordinated
securities issued under the Subordinated Indenture will rank pari passu with all
other subordinated indebtedness of AMERCO and will be subordinate and junior in
right of payment, to the extent and in the manner set forth in the Subordinated
Indenture, to all Senior
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Indebtedness of AMERCO. The Subordinated Indenture does not contain any
limitation on the amount of Senior Indebtedness than can be incurred by AMERCO.
The Subordinated Indenture provides that AMERCO may make no principal, interest
or other payment on account of any subordinated securities or redeem, defease
(other than payments made by the Subordinated Trustee pursuant to the provisions
of the Subordinated Indenture described under "Defeasance") or acquire any of
the subordinated securities for cash, property or securities:
* upon the maturity of the Designated Senior Indebtedness or any
other Senior Indebtedness with an aggregate principal amount in
excess of $1,000,000 unless and until all principal, premium
and interest on such Senior Indebtedness and all other
obligations in respect thereof are first paid in full in cash
or cash equivalents or such payment is duly provided for, or
unless and until any such maturity by acceleration has been
rescinded or waived; or
* in the event of default in the payment of any principal,
premium or interest on or any other amount payable in respect
of the Designated Senior Indebtedness or any other Senior
Indebtedness with an aggregate principal amount in excess of
$1,000,000 when it becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or
otherwise, unless and until such payment default has been cured
or waived or has otherwise ceased to exist.
Upon the happening of a default (any event that after notice or passage of time
would be an event of default) or an event of default (any event that permits the
holders of Senior Indebtedness or their representative or representatives
immediately to accelerate its maturity) with respect to any Senior Indebtedness,
other than a default in payment of the principal, premium or interest on such
Senior Indebtedness, and upon written notice of such default or event of default
given to AMERCO and the Subordinated Trustee by the holders of a majority of the
principal amount outstanding of the Designated Senior Indebtedness or their
representative or, at such time there is not Designated Senior Indebtedness, the
holders of a majority of the principal amount outstanding of all Senior
Indebtedness or their representative or representatives or, if such default or
event of default results from the acceleration of the subordinated securities,
immediately upon such acceleration, then, unless such default or event of
default has been cured or waived or otherwise has ceased to exist, AMERCO may
make no payment with respect to any obligation or claim in respect of the
subordinated securities.
Notwithstanding the foregoing, unless the Senior Indebtedness in respect of
which such default or event of default exists has been declared due and payable
in its entirety within 180 days after the date written notice of such default or
event of default is delivered as set forth above or the date of such
acceleration as the case may be (the "payment blockage period"), and such
declaration or acceleration has not been rescinded, AMERCO may then pay all sums
not paid to the holders of the subordinated securities during the payment
blockage period due to the foregoing prohibitions and resume all other payments
as and when due on the subordinated securities. Any number of such notices may
be given; provided, however, that (1) during any 360 consecutive days, only one
payment blockage
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period may commence and (2) any such default or event of default that existed
upon the commencement of a payment blockage period may not be the basis for the
commencement of any other payment blockage period, unless such default or event
of default shall have been cured or waived for a period of not less than 90
consecutive days.
In the event that any payment or distribution of assets of AMERCO from any
source is received by the Subordinated Trustee or the holders on account of any
obligation or claim in respect of the subordinated securities at a time when
such payment or distribution is prohibited by the foregoing provisions, such
payment or distribution will be held in trust for the benefit of the holders of
Senior Indebtedness, and will be paid or delivered by the Subordinated Trustee
or such holders, as the case may be, to the holders of the Senior Indebtedness
remaining unpaid or unprovided for ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness.
The holders of the Senior Indebtedness and their respective representatives are
authorized to demand specific performance of the provisions with respect to
subordination in the Subordinated Indenture at any time when AMERCO or any
holder shall have failed to comply with any provision with respect to
subordination in the Subordinated Indenture applicable to it, and AMERCO and
each holder irrevocably waives any defense based on the adequacy of a remedy at
law that might be asserted as a bar to the remedy of specific performance of
such subordination provision in any action brought therefor by the holders of
the Senior Indebtedness and their respective representatives.
By reasons of such subordination, in the event of the liquidation or insolvency
of AMERCO, creditors of AMERCO who are not holders of Senior Indebtedness,
including holders of the subordinated securities, may recover less, ratably,
than holders of Senior Indebtedness.
No provision contained in the Subordinated Indenture or the subordinated
securities will affect the obligation of AMERCO, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest on
the subordinated securities. The subordination provisions of the Subordinated
Indenture and the subordinated securities will not prevent the occurrence of any
Event of Default under either of the Indentures or limit the rights of the
Subordinated Trustee or any holder, except as provided in the seven preceding
paragraphs, to pursue any other rights or remedies with respect to the
subordinated securities.
COVENANTS
The Indentures contain several restrictive covenants. The Indentures do not
contain:
* any restrictions on AMERCO paying dividends or making other
distributions on any of its capital stock or purchasing or
redeeming any of its capital stock;
* any restrictions on AMERCO incurring, assuming or become liable
upon senior indebtedness or subordinated indebtedness or any
other type of debt securities or other obligations;
* any restrictions on AMERCO creating liens on its property for
any purpose; or
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* any requirement on AMERCO adhering to any financial ratios or
specified levels of net worth or liquidity.
Any additional restrictive covenants relating to any series of debt securities
will be described in the prospectus supplement relating to such series. If any
such covenants are described, the prospectus supplement will also state whether
the "covenant defeasance" provisions described below will apply.
* Corporate Existence
AMERCO will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and material rights (charter and
statutory) and material franchises of AMERCO; provided, however, that AMERCO
shall not be required to preserve any such right or franchise if our Board of
Directors shall determine that the preservation of such rights and franchises is
no longer desirable in the conduct of the business of AMERCO and our
consolidated subsidiaries considered as a whole, and that the loss thereof is
not disadvantageous in any material respect to the holders of the debt
securities.
* Consolidation, Merger, and Sale of Assets
AMERCO, without the consent of any holders of outstanding debt securities, may
consolidate or merge with or into, or transfer or lease its assets as an
entirety to, any corporation, provided that (i) the corporation (if other than
AMERCO) formed by such consolidation or into which AMERCO is merged or that
acquires or leases the assets of AMERCO substantially as an entirety is a
corporation, partnership or trust, is organized and existing under the laws of
any United States jurisdiction and expressly assumes AMERCO's obligations on the
debt securities and under the Indentures, (ii) after giving effect to such
transaction no Event of Default, and no event that, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing (provided that a transaction will only be deemed to be in violation
of this condition (ii) as to any series of debt securities as to which such
Event of Default or such event shall have occurred and be continuing), and (iii)
certain other conditions are met.
EVENTS OF DEFAULT
The following are Events of Default under each Indenture with respect to debt
securities of any series issued thereunder:
(1) failure to pay principal of or premium, if any, on any debt
security of that series when due;
(2) failure to pay any interest on any debt security of that series
when due, continued for 30 days;
(3) (i) the failure by AMERCO or any of our subsidiaries to pay
indebtedness for money borrowed (including debt securities of
other series) in an aggregate principal amount exceeding
$10,000,000 at the later of final maturity or upon the
expiration of any applicable period of grace with respect to
such principal amount or (ii) acceleration of the maturity of
any indebtedness for money borrowed of AMERCO or any of our
subsidiaries in
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excess of $10,000,000, if such failure to pay or acceleration is
not discharged or such acceleration is not annulled within 15
days after due notice;
(4) failure to deposit any sinking fund payment, when due, in
respect of any debt security of that series;
(5) failure to perform any other covenant or warranty of AMERCO in
such Indenture (other than a covenant or warranty included in
such Indenture solely for the benefit of a series of debt
securities other than that series), continued for 60 days after
written notice as provided in such Indenture;
(6) certain events in bankruptcy, insolvency or reorganization; and
(7) any other Event of Default provided with respect to debt
securities of that series.
If an Event of Default specified in clause (6) above occurs and is continuing
with respect to a series of debt securities, then the principal amount of the
outstanding debt securities shall become immediately due and payable without any
declaration or other act on the part of the applicable Trustee or any holder. If
an Event of Default (not specified in clause (6) above) shall occur and be
continuing with respect to outstanding debt securities of any series, either the
applicable Trustee or the holders of at least 25% in principal amount of the
outstanding debt securities of that series may declare the principal amount (or,
if the debt securities of that series are original issue discount securities,
such portion of the principal amount as may be specified in the terms of that
series) of all the debt securities of that series to be due and payable
immediately by written notice to AMERCO (and to the applicable Trustee if given
by the holders). At any time after a declaration of acceleration with respect to
debt securities of any series has been made, but before a judgment or decree
based on acceleration has been obtained, the holders of a majority in principal
amount of the outstanding debt securities of that series may, under certain
circumstances, rescind and annul such acceleration. For information as to waiver
of defaults, see "Modification and Waiver" below.
Reference is made to the prospectus supplement relating to each series of
Offered Securities that are original issue discount securities for the
particular provisions relating to acceleration of the maturity of a portion of
the principal amount of such original issue discount securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indentures provides that each Trustee will be under no obligation, subject
to the duty of the applicable Trustee during default to act with the required
standard of care, to exercise any of its rights or powers under the related
Indenture at the request or direction of any of the holders, unless such holders
shall have offered to the applicable Trustee reasonable indemnity. Subject to
such provisions for indemnification of the applicable Trustee, the holders of a
majority in principal amount of the outstanding debt securities of any series
will have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to that Trustee, or exercising any trust or
power conferred on that Trustee, with respect to the debt securities of that
series.
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AMERCO will furnish to each Trustee annually a certificate as to compliance by
AMERCO with all terms, provisions and conditions of the applicable Indenture.
DEFEASANCE
The prospectus supplement will state if any additional defeasance provision will
apply to the Offered Securities.
Defeasance and Discharge
Each Indenture provides that, if applicable, AMERCO will be discharged from any
and all obligations in respect of the debt securities of any series issued
thereunder (except for certain obligations to register the transfer or exchange
of debt securities of such series, to replace stolen, lost, or mutilated debt
securities of such series, to maintain paying agencies and to hold monies for
payment in trust) upon the irrevocable deposit with the applicable Trustee, in
trust, of money and/or U.S. Government obligations, which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of and premium, if
any, and each installment of interest on the debt securities of that series on
the stated maturity of such payments in accordance with the terms of the
applicable Indenture and the debt securities of such series. Such a trust may
only be established if, among other things, AMERCO has delivered to the
applicable Trustee an opinion of counsel (who may be an employee of or counsel
for AMERCO) to the effect that AMERCO has received from, or there has been
published by, the Internal Revenue Service a ruling or there has been a change
in the applicable United States federal income tax law to the effect that
holders of the debt securities of that series will not recognize income, gain,
or loss for federal income tax purposes as a result of such deposit, defeasance,
and discharge and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such
deposit, defeasance, and discharge had not occurred.
However, the Statement of Financial Accounting Standards No. 125 "Accounting for
Transfers and Services of Financial Assets and Extinguishments of Liabilities"
as issued by the Financial Accounting Standard's Board will generally not permit
the in-substance defeasance of debt as described above.
Defeasance of Certain Covenants and Certain Events of Default
Each Indenture provides that AMERCO may omit to comply with the covenants
described under "Covenants," and that may be described in a prospectus
supplement and as set forth in a related Supplemental Indenture, and that
violations of such covenants will not be deemed to be an Event of Default under
the applicable Indenture to the extent that the conditions described herein are
met. Each Indenture also provides with respect to the Offered Securities of any
series issued thereunder, to the extent provided for in the prospectus
supplement, that AMERCO may omit to comply with certain restrictive covenants
provided for in this prospectus or the prospectus supplement and, to the extent
provided in the prospectus supplement, that violations of certain restrictive
covenants provided for in the prospectus supplement shall not be deemed to be an
Event of Default under the applicable Indenture and the debt securities of such
series, upon the deposit with the applicable Trustee, in trust, of money and/or
U.S. Government obligations which
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through the payment of interest and principal in respect thereof in accordance
with their terms will provide money in an amount sufficient to pay the principal
of and premium, if any, and each installment of interest on the debt securities
of such series on the stated maturity of such payments in accordance with the
terms of the applicable Indenture and the debt securities of such series. The
obligations of AMERCO under the applicable Indenture and the debt securities of
such series other than with respect to the covenants referred to above and the
Events of Default other than the Event of Default referred to above shall remain
in full force and effect. Such a trust may only be established if, among other
things, AMERCO has delivered to the applicable Trustee an opinion of counsel
(who may be an employee of or counsel for AMERCO) to the effect that the holders
of the debt securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and defeasance of
certain covenants and Events of Default and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred.
Defeasance and Certain Other Events of Default
In the event AMERCO exercises its option to omit compliance with certain
covenants of the applicable Indenture with respect to the Offered Securities of
any series as described above issued thereunder and the Offered Securities of
such series are declared due and payable because of the occurrence of any Event
of Default other than the Event of Default due to certain events in bankruptcy,
insolvency, or reorganization described under "Events of Default," the amount of
money and U.S. Government obligations on deposit with the applicable Trustee
will be sufficient to pay amounts due on the Offered Securities of such series
at the time of their stated maturity but may not be sufficient to pay amounts
due on the Offered Securities of such series at the time of the acceleration
resulting from such Event of Default. However, AMERCO shall remain liable for
such payments.
MODIFICATION AND WAIVER
Modifications and amendments of the Indentures may be made by AMERCO and the
Trustees with the consent of the holders of a majority in principal amount of
the outstanding debt securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the holder of each outstanding debt security affected
thereby:
* change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security;
* reduce the principal amount of, or the premium, if any, or interest,
if any, on any debt security or any premium payable upon the
redemption thereof;
* reduce the amount of principal of an original issue discount security
payable upon acceleration of the maturity thereof;
* adversely affect the rights of such holder under any mandatory
redemption or repurchase provision or any right or redemption or
repurchase at the option of such holder;
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* change the place or currency of payment of principal of, or premium,
if any, or interest, if any, on, any debt security;
* impair the right to institute suit for the enforcement of any payment
on or with respect to any debt security;
* with respect to the Subordinated Indenture, modify the terms relating
to subordination in a manner adverse to the holders of debt securities
issued under such Subordination Indenture; or
* reduce the percentage in principal amount of outstanding debt
securities of any series, the consent of the holders of which is
required for modification or amendment of the applicable Indenture or
for waiver of compliance with certain provisions of the applicable
Indenture or for waiver of certain defaults.
The holders of a majority in principal amount of the outstanding debt securities
of any series may on behalf of the holders of all debt securities of that series
waive, insofar as that series is concerned, compliance by AMERCO with certain
restrictive provisions of the applicable Indenture. The holders of a majority in
principal amount of the outstanding debt securities of any series may on behalf
of the holders of all debt securities of that series waive any past default
under the applicable Indenture with respect to that series, except a default in
the payment of the principal of or premium, if any, or interest on any debt
security of that series or in respect of a provision that under the applicable
Indenture cannot be modified or amended without the consent of the holder of
each outstanding debt security of that series affected.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants contained in the applicable Indenture. Reference is made to the
applicable Indenture for the full definition of all such terms as well as any
other capitalized terms used herein for which no definition is provided.
"consolidated subsidiary" means any subsidiary of a person or of any
consolidated subsidiary which is consolidated with such person for financial
reporting purposes in accordance with United States generally accepted
accounting principles.
"Designated Senior Indebtedness" means any class of Senior Indebtedness the
aggregate principal amount outstanding of which exceeds $50,000,000 and which is
specifically designated in the instrument evidencing such Senior Indebtedness or
the agreement under which such Senior Indebtedness arises as "Designated Senior
Indebtedness."
"indebtedness for money borrowed," when used with respect to AMERCO or any of
our subsidiaries, means any obligation of, or any obligation guaranteed by,
AMERCO or any of our subsidiaries for the repayment of borrowed money, whether
or not evidenced by bonds, debentures, notes or other written instruments, and
any deferred obligation of, or any such obligation guaranteed by, AMERCO for the
payment of the purchase price of property or assets.
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"Senior Indebtedness" as defined in the Subordinated Indenture means the
principal of and premium, if any, and interest on (a) all indebtedness of AMERCO
whether outstanding on the date of the Subordinated Indenture or thereafter
created:
* for money borrowed by AMERCO;
* for money borrowed by, or obligations of, others and either
assumed or guaranteed, directly or indirectly, by AMERCO;
* in respect of letters of credit and acceptances issued or made
by banks; or
* constituting purchase money indebtedness, or indebtedness
secured by property included in the property, plant and
equipment accounts of AMERCO at the time of the acquisition of
such property by AMERCO, for the payment of which AMERCO is
directly liable;
and (b) all deferrals, renewals, extensions and refunding of, and amendments,
modifications and supplements to, any such indebtedness. As used in the
preceding sentence, the terms "purchase money indebtedness" means indebtedness
evidenced by a note, debenture, bond or other instrument (whether or not secured
by any lien or other security interest) issued or assumed as all or a part of
the consideration for the acquisition of property, whether by purchase, merger,
consolidation or otherwise, unless by its terms such indebtedness is
subordinated to other indebtedness of AMERCO. Notwithstanding anything to the
contrary in the Subordinated Indenture or the subordinated securities, Senior
Indebtedness shall not include (1) any indebtedness of AMERCO which, by its
terms or the terms of the instrument creating or evidencing it, is subordinate
in right of payment to or pari passu with the subordinated securities or (2) any
indebtedness of AMERCO to a subsidiary of AMERCO.
"subsidiary" means a person more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by such person or by one or more other
subsidiaries, or by such person and one or more other subsidiaries of such
person.
CONCERNING THE TRUSTEE
AMERCO may maintain banking and other commercial relationships with the
applicable Trustee and its affiliates in the ordinary course of business.
GOVERNING LAW
The Indentures and the Offered Securities will be governed by and construed in
accordance with the laws of the State of New York.
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PLAN OF DISTRIBUTION
We may sell the Offered Securities:
* through agents;
* through underwriters or dealers;
* directly to one or more purchasers; or
* through some combination of these methods.
By Agents
The Offered Securities may be sold through agents we designate. Except as
otherwise set forth in a prospectus supplement, the agents will agree to use
their reasonable best efforts to solicit purchases for the period of their
appointment.
By Underwriters
If underwriters are used in the sale, the underwriters will acquire the Offered
Securities for their own account. The underwriters may resell the Offered
Securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The obligations of the underwriters to purchase the Offered Securities will be
subject to certain conditions. The underwriters will be obligated to purchase
all the Offered Securities of the series offered if any of the Offered
Securities are purchased. Any public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time to
time.
By Dealers
If dealers are used in the sale, we will sell the Offered Securities to the
dealers, as principal. The dealers may then resell the Offered Securities to the
public at varying prices to be determined by them at the time of sale.
Direct Sales
We may also directly sell the Offered Securities. In this case, no underwriters,
dealers or agents would be involved.
General Information
Any underwriter, dealer or agent involved in the offer and sale of the Offered
Securities will be named in the applicable prospectus supplement. Underwriters,
dealers and agents that participate in the distribution of the Offered
Securities may be deemed underwriters under the Securities Act of 1933, and any
discounts or commissions they receive from us or commissions from purchasers of
the Offered Securities may be treated as underwriting discounts, concessions or
commissions under the Securities Act. Any underwriter, dealer or agent will be
identified and their compensation described in the applicable prospectus
supplement.
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We may have agreements with the underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under the
Securities Act, or to contribute to payments that the underwriters, dealers or
agents may be required to make.
Certain of the underwriters or agents and their affiliates may be customers of,
engage in transactions with and perform investment banking, commercial banking
and other financial services for AMERCO and our affiliates in the ordinary
course of business.
Each series of Offered Securities will be a new issue with no established
trading market. We do not intend to list any of the Offered Securities on a
national securities exchange or quotation system. It is possible that one or
more underwriters or broker-dealers may make a market in the Offered Securities,
but will not be obligated to do so and may discontinue any market making at any
time without notice. Therefore, we can give you no assurance as to the existence
or liquidity of a trading market for any of the Offered Securities.
In connection with an offering of our Offered Securities, underwriters, dealers
or agents may purchase and sell them in the open market. These transactions may
include stabilizing transactions and purchases to cover syndicate short
positions created in connection with the offering. Stabilizing transactions
consist of certain bids or purchases for the purpose of preventing or slowing a
decline in the market price of the Offered Securities; and syndicate short
positions involve the sale by the underwriters, dealers or agents, as the case
may be, of a greater number of Offered Securities than they are required to
purchase from us in the offering. Underwriters also may impose a penalty bid,
which means that the underwriting syndicate may reclaim selling concessions
allowed to syndicate members or other broker dealers who sell Offered Securities
in the offering for their account if the syndicate repurchases the securities in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Offered Securities, which may be
higher than the price that might otherwise prevail in the open market. These
activities, if commenced, may be discontinued at any time without notice. These
transactions may be effected on any securities exchange on which the Offered
Securities may be listed, in the over-the-counter market or otherwise.
LEGAL OPINIONS
Our counsel, Lionel, Sawyer & Collins, located at 300 S. 4th Street, Suite 1700,
Las Vegas, Nevada 89101, will issue a legal opinion about the validity of the
Offered Securities. Counsel named in the applicable prospectus supplement will
advise the underwriters.
EXPERTS
The consolidated financial statements of AMERCO as of March 31, 1998 and 1997
and for each of the fiscal years in the three-year period ended March 31, 1998,
incorporated in this prospectus by reference to AMERCO's Annual Report on Form
10-K for the fiscal year ended March 31, 1998 have been so incorporated by
reference herein and in the registration statement in reliance upon the reports
of PricewaterhouseCoopers LLP, independent accountants, and upon the authority
of said firm as experts in auditing and accounting.
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MARCH 30, 1999
[UHAUL LOGO]
$150,000,000
AMERCO
7.20% SENIOR NOTES DUE 2002
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PROSPECTUS SUPPLEMENT
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NATIONSBANC MONTGOMERY SECURITIES LLC
MORGAN STANLEY DEAN WITTER
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