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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 1, 1998.
REGISTRATION NO. 333-60543
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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HOUSEHOLD FINANCE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
36-1239445
(I.R.S. EMPLOYER IDENTIFICATION NUMBER)
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(847) 564-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
PATRICK D. SCHWARTZ, ESQ.
ASSOCIATE GENERAL COUNSEL AND ASSISTANT SECRETARY
HOUSEHOLD INTERNATIONAL, INC.
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
(847) 564-6301
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
WITH A COPY TO:
(UNDERWRITER'S/AGENT'S COUNSEL)
SCOTT N. GIERKE, ESQ.
MCDERMOTT, WILL & EMERY
227 WEST MONROE STREET
CHICAGO, ILLINOIS 60606
(312) 984-7521
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 1, 1998
HOUSEHOLD FINANCE CORPORATION
DEBT SECURITIES
AND
WARRANTS TO PURCHASE DEBT SECURITIES
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Household Finance Corporation ("HFC" or the "Company") from time to time
may offer one or more series of its debt securities ("Debt Securities") and
warrants ("Warrants") to purchase Debt Securities (the Debt Securities and
Warrants being hereinafter collectively called "Securities") having an aggregate
initial offering price of up to $3,300,000,000, or the equivalent thereof if any
of the Securities are denominated in a foreign currency or a foreign currency
unit. The Debt Securities will be offered as separate series in amounts, at
prices and on terms to be determined at the time of sale and to be set forth in
supplements to this Prospectus. The Debt Securities and Warrants may be sold for
U.S. dollars, foreign currencies or foreign currency units, and the principal of
and any interest on the Debt Securities may be payable in U.S. dollars, foreign
currencies or foreign currency units. The specific designation and
classification as senior or senior subordinated debt securities of HFC,
aggregate principal amount, the currency or currency unit for which the
Securities may be purchased, the currency or currency unit in which the
principal and any interest is payable, the rate (or method of calculation) and
time of payment of any interest, authorized denominations, maturity, offering
price, any redemption terms or other specific terms of the Securities in respect
of which this Prospectus is being delivered are set forth in one or more
supplements to this Prospectus ("Prospectus Supplement"). With regard to the
Warrants, if any, in respect of which this Prospectus is being delivered, the
Prospectus Supplement sets forth a description of the Debt Securities for which
each Warrant is exercisable and the offering price, if any, exercise price,
duration, detachability and other terms of the Warrants.
HFC may sell Securities through underwriting syndicates led by one or more
managing underwriters or through one or more underwriting firms acting alone, to
or through dealers, acting as principals for their own account or as agents, and
also may sell Securities directly to other purchasers. See "Plan of
Distribution". The names of any underwriters or agents involved in the sale of
the Securities in respect to which this Prospectus is being delivered and their
compensation are set forth in the Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER , 1998.
<PAGE> 3
AVAILABLE INFORMATION
HFC is subject to the informational requirements of the Securities Exchange
Act of 1934 and in accordance therewith files reports and other information with
the Securities and Exchange Commission (the "Commission"). Such reports and
other information can be inspected and copied at the public reference facilities
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at the Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade
Center, Suite 1300, New York, New York 10048, or through the Internet Web site
maintained by the Commission at (http://www.sec.gov). Copies of such material
can also be obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
certain debt securities of HFC are listed on the New York Stock Exchange, and
reports and other material concerning HFC can be inspected at the offices of
such Exchange at 20 Broad Street, New York, New York 10005. Although HFC is not
required to send an annual report to its security holders, HFC will, upon
request, send to any security holder a copy of its latest Annual Report on Form
10-K, as filed with the Commission, which contains financial information that
has been examined and reported upon, with an opinion expressed, by independent
certified public accountants.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No. 1-75)
pursuant to the Securities Exchange Act of 1934 and are incorporated herein by
reference and made a part of this Prospectus:
(a) HFC's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) HFC's Quarterly Reports on Form 10-Q for the quarters ended March
31, and June 30, 1998; and
(c) HFC's Current Reports on Form 8-K dated February 12, April 7, June
2, June 11, June 30, and September 1, 1998.
All documents filed by HFC with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date
of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and made a
part of this Prospectus from the respective dates of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
HFC WILL PROVIDE WITHOUT CHARGE TO EACH PERSON (INCLUDING ANY BENEFICIAL
OWNER) TO WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
ANY SUCH PERSON, A COPY OF ANY OR ALL DOCUMENTS INCORPORATED HEREIN BY REFERENCE
(OTHER THAN EXHIBITS TO SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO:
HOUSEHOLD FINANCE CORPORATION
2700 SANDERS ROAD
PROSPECT HEIGHTS, ILLINOIS 60070
ATTENTION: OFFICE OF THE SECRETARY
TELEPHONE: (847) 564-5000
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HOUSEHOLD FINANCE CORPORATION
HFC was incorporated in Delaware in 1925, as successor to an enterprise
which traces its origin through the same ownership to an office established in
1878. The address of its principal executive office is 2700 Sanders Road,
Prospect Heights, Illinois 60070 (telephone (847) 564-5000). HFC is a subsidiary
of Household International, Inc. ("Household International").
HFC and its subsidiaries offer a diversified range of financial services.
The principal product of HFC's consumer financial services business is the
making or purchasing of cash loans and sales finance contracts, including home
equity loans secured by first and second mortgages, automotive installment sales
finance contracts and unsecured credit advances (including revolving and
closed-end personal loans) to middle-income consumers in the United States.
Loans are made through branch lending offices and through direct marketing
efforts. HFC also seeks to acquire portfolios of open-end and closed-end,
secured and unsecured loans.
HFC, through banking subsidiaries, offers both MasterCard* and VISA* credit
cards to residents throughout the United States.
Through its subsidiaries, HFC also purchases and services revolving charge
card accounts originated by merchants. These accounts result from consumer
purchases of goods and services from the originating merchant. Closed-end sales
contracts are also directly originated by subsidiaries of HFC.
Where applicable laws permit, HFC offers credit life and credit accident,
health and disability insurance to its customers. Such insurance is generally
written directly by, or reinsured with, one of HFC's insurance affiliates.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, HFC will apply the
net proceeds from the sale of the Securities to its general funds to be used in
its financial services business, including the funding of investments in, or
extensions of credit to, affiliates of HFC. Pending such applications, the net
proceeds will be used initially to reduce outstanding commercial paper of HFC.
The proceeds of such commercial paper are used in connection with HFC's
financial services business.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for HFC and subsidiaries for the
periods indicated below was as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
--------------- --------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
HFC and subsidiaries -- calculated on income
from continuing operations.................... .87 1.65 1.61 1.57 1.41 1.51 1.54
</TABLE>
For purposes of calculating the ratio, earnings consist of income from
continuing operations to which has been added income taxes and fixed charges.
Fixed charges consist of interest on all indebtedness and one-third of rental
expense (approximate portion representing interest). The June 30, 1998 ratio has
been negatively impacted by one-time merger and integration related costs
associated with the merger of Household International and Beneficial
Corporation. Excluding the merger and integration related costs, the June 30,
1998 ratio would have been 1.82.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Debt Securities") and the extent to which
such general
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*MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and VISA USA,
Inc., respectively.
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terms and provisions may apply to the Offered Debt Securities will be described
in the Prospectus Supplement relating to such Offered Debt Securities.
GENERAL
Offered Debt Securities will constitute either senior or senior
subordinated unsecured debt of HFC and will be issued under one of the
indentures specified elsewhere herein (the "Indentures"). The Indentures, or
forms thereof, and the Standard Provisions (as defined herein) have been filed
as exhibits to HFC's Registration Statement which registers the Securities with
the Commission. The following summaries do not purport to be complete and, where
particular provisions of an Indenture or the Standard Provisions are referred
to, such provisions, including definitions of certain terms, are incorporated by
reference as part of such summaries, which are qualified in their entirety by
such reference.
The Indentures provide that Debt Securities may be issued thereunder from
time to time in one or more series and do not limit the aggregate principal
amount of the Debt Securities except as may be otherwise provided with respect
to any particular series of Offered Debt Securities.
Unless otherwise indicated in the Prospectus Supplement with respect to any
particular series of Offered Debt Securities, the Debt Securities will be issued
in registered form without coupons, will be exchangeable for authorized
denominations, and will be transferable at any time or from time to time. No
charge will be made to the holder for any such exchange or registration of
transfer except for any tax or governmental charge incident thereto. The Debt
Securities of any series may be issued in whole or in part in the form of one or
more global securities that will be deposited with, or on behalf of, a
depositary. See "Book-Entry System" below.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms and other
information to the extent applicable with respect to the Offered Debt
Securities: (1) the title of the Offered Debt Securities and whether such
Offered Debt Securities will be senior or senior subordinated debt of HFC; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
the price (expressed as a percentage of the aggregate principal amount thereof)
HFC will be paid for the Offered Debt Securities and the initial offering price,
if any, at which the Offered Debt Securities will be offered to the public; (4)
the currency, currencies or currency units for which the Offered Debt Securities
may be purchased and the currency, currencies or currency units in which the
principal of and any interest on such Offered Debt Securities may be payable;
(5) the date or dates on which the Offered Debt Securities will mature; (6) the
rate or rates (which may be fixed or variable) per annum at which the Offered
Debt Securities will bear interest, if any; (7) the date from which such
interest, if any, on the Offered Debt Securities will accrue, the dates on which
such interest, if any, will be payable, the date on which payment of such
interest, if any, will commence, and the Regular Record Dates for such Interest
Payment Dates, if any; (8) the dates, if any, on which and the price or prices
at which the Offered Debt Securities will, pursuant to any mandatory sinking
fund provisions, or may, pursuant to any optional sinking fund or to any
purchase fund provisions, be redeemed by HFC, and the other detailed terms and
provisions of such sinking and/or purchase funds; (9) the date, if any, after
which and the price or prices at which the Offered Debt Securities may, pursuant
to any optional redemption provisions, be redeemed at the option of HFC or of
the holder thereof and the other detailed terms and provisions of such optional
redemption; (10) the denominations in which the Offered Debt Securities are
authorized to be issued; (11) the securities exchange, if any, on which the Debt
Securities will be listed; and (12) additional provisions, if any, with respect
to the Offered Debt Securities.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of or any interest on any series of Debt
Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of Debt Securities and such currencies or currency
units will be set forth in a Prospectus Supplement relating thereto.
Debt Securities may be issued as Original Issue Discount Securities to be
offered and sold at a discount below their stated principal amount. "Original
Issue Discount Securities" means any Debt Securities that provide for an amount
less than the principal amount thereof to be due and payable upon a declaration
of
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acceleration of the maturity thereof upon the occurrence of an Event of Default
and the continuation thereof. As used in the following summary of certain terms
of the Debt Securities, the term "principal amount" means, in the case of any
Original Issue Discount Security, the amount that would then be due and payable
upon acceleration of the maturity thereof, as specified in such Debt Security.
BOOK-ENTRY SYSTEM
If so indicated in the Prospectus Supplement with respect to any series of
Offered Debt Securities, such Offered Debt Securities will be represented by one
or more global securities (the "Global Security"). The Global Security will be
deposited with, or on behalf of, The Depository Trust Company (the "Depositary")
and registered in the name of a nominee of the Depositary. Except under
circumstances described below, such Offered Debt Securities will not be issuable
in definitive form.
The Depositary has advised the Company and any underwriters, dealers or
agents named in the applicable Prospectus Supplement as follows: the Depositary
is a limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. The Depositary was created to hold securities of 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 Depositary's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations, some of which (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies, that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Upon the issuance of the Global Security, the Depositary will credit on its
book-entry registration and transfer system the accounts of participants with
the respective principal amounts of the Offered Debt Securities represented by
the Global Security. Ownership of beneficial interests in the Global Security
will be limited to persons that have accounts with the Depositary or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in the Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary or its nominee (with respect to interests of participants) and
on the records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
So long as the Depositary or its nominee is the registered owner of the
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Offered Debt Securities represented
by the Global Security for all purposes under the Indenture. Except as provided
below, owners of beneficial interests in the Global Security will not be
entitled to have Offered Debt Securities represented by the Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Offered Debt Securities in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Principal and interest payments on Offered Debt Securities registered in
the name of the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security.
None of the Company, the Trustee, any paying agent or the registrar for the
Offered Debt Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial interests
in the Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial interests.
The Company expects that the Depositary for the Offered Debt Securities or
its nominee, upon receipt of any payment of principal or interest, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of the Global
Security as shown on the records of the Depositary or its nominee. The Company
also expects that payments by participants to
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owners of beneficial interests in the Global Security held through such
participants 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 such
participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by the Company within 90
days, the Company will issue Offered Debt Securities in definitive form in
exchange for the entire Global Security. In addition, the Company may at any
time and in its sole discretion determine not to have the Offered Debt
Securities represented by the Global Security and, in such event, will issue
Offered Debt Securities in definitive form in exchange for the entire Global
Security. In any such instance, an owner of a beneficial interest in the Global
Security will be entitled to physical delivery in definitive form of Offered
Debt Securities represented by the Global Security equal in principal amount to
such beneficial interest and to have such Offered Debt Securities registered in
its name. Offered Debt Securities so issued in definitive form will be issued as
registered Offered Debt Securities in denominations of $1,000 and integral
multiples thereof, unless otherwise specified by the Company.
SENIOR DEBT SECURITIES
The trustees for the indentures under which Offered Debt Securities
constituting senior debt of HFC (the "Senior Debt Securities") will be issued
shall be either U.S. Bank Trust National Association (formerly known as First
Trust of Illinois, National Association, successor in interest to Bank of
America Illinois, formerly known as Continental Bank, National Association), The
Bank of New York (successor in interest to NationsBank of Tennessee), The First
National Bank of Chicago, Harris Trust and Savings Bank, The First National Bank
of Maryland, or such other entity which may be specified in the Prospectus
Supplement (collectively, the "Senior Trustees"). Each particular series of
Senior Debt Securities will be issued under the Indenture specified in the
Prospectus Supplement between HFC and a Senior Trustee, which will incorporate
the terms and provisions of the Standard Multiple-Series Indenture Provisions
for Senior Debt Securities dated as of June 1, 1992 (the "Standard Provisions").
The above noted indentures are collectively called the "Indentures for Senior
Debt Securities" herein. Senior Debt Securities will rank on a parity with all
unsecured debt of HFC, and prior to all subordinated debt.
Principal of and interest, if any, on Senior Debt Securities will be
payable at the office or agency of HFC specified in the Prospectus Supplement,
depending on the Senior Trustee; provided, however, that payment of interest may
be made at the option of HFC by check or draft mailed to the person entitled
thereto.
Covenant Against Creation of Pledges or Liens
All Senior Debt Securities issued under the Indentures for Senior Debt
Securities will be unsecured. HFC covenants that, with the exceptions listed
below, it will not issue, assume or guarantee any indebtedness for borrowed
money secured by a mortgage, security interest, pledge or lien ("security
interest") of or upon any of its property, now owned or hereafter acquired,
unless the Senior Debt Securities then outstanding are, by supplemental
indenture, effectively secured by such security interest equally and ratably
with all other indebtedness secured thereby for so long as such other
indebtedness shall be so secured. The term "indebtedness for borrowed money"
does not include any guarantee, cash deposit or other recourse obligation in
connection with the sale, securitization or discount by HFC of finance or
accounts receivables, trade acceptances, or other paper arising in the ordinary
course of its business.
The foregoing covenant does not apply to (a) security interests to secure
the payment of the purchase price of property, shares of capital stock, or
indebtedness acquired by HFC or the cost of construction or improvement of such
property or the refinancing of all or any part of such secured indebtedness,
provided that such security interests do not apply to any other property, shares
of capital stock, or indebtedness of HFC; (b) security interests on property,
shares of capital stock, or indebtedness existing at the time of acquisition by
HFC; (c) security interests on property of a corporation which security
interests exist at the time such corporation merges or consolidates with or into
HFC or which security interests exist at the time of the sale or transfer of all
or substantially all of the assets of such corporation to HFC; (d) security
interests to secure any indebtedness of HFC to a subsidiary; (e) security
interests in property of HFC in favor of the United States of
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America or any state or agency or instrumentality thereof, or in favor of any
other country or political subdivision, to secure partial, progress, advance, or
other payments pursuant to any contract or statute or to secure any indebtedness
incurred or guaranteed for the purpose of financing all or any part of the
purchase price or the cost of construction of the property subject to such
security interests; (f) security interests on properties financed through
tax-exempt municipal obligations; provided that such security interests are
limited to the property so financed; (g) security interests existing on the date
of execution of the applicable Indenture; and (b) any extension, renewal,
refunding, or replacement (or successive extensions, renewals, refundings, or
replacements), in whole or in part, of any security interest referred to in the
foregoing clauses (a) through (g) inclusive; provided, however, that the
principal amount of indebtedness secured in such extension, renewal, refunding,
or replacement does not exceed the principal amount of indebtedness secured at
the time by such security interest; provided, further, that such extension,
renewal, refunding, or replacement of such security interest is limited to all
or part of the property subject to such security interest so extended, renewed,
refunded, or replaced.
Notwithstanding the foregoing, HFC may, without equally and ratably
securing the Senior Debt Securities, issue, assume, or guarantee indebtedness
secured by a security interest not excepted pursuant to clauses (a) through (b)
above if the aggregate amount of such indebtedness, together with all other
indebtedness of, or guaranteed by, HFC existing at such time and secured by
security interests not so excepted, does not at the time exceed 10% of HFC's
Consolidated Net Worth (as defined). In addition, an arrangement with any person
providing for the leasing by HFC of any property, which property has been or is
to be sold or transferred by HFC to such person with the intention that such
property be leased back to HFC, shall not be deemed to create any indebtedness
secured by a security interest if the obligation in respect to such lease would
not be included as a liability on a consolidated balance sheet of HFC. The
holders of not less than a majority in principal amount of the Debt Securities
at the time outstanding under an Indenture, on behalf of the holders of all of
the Debt Securities issued under such Indenture, may waive compliance with the
foregoing covenant. (Standard Provisions -- Section 3.08)
Concerning the Trustees
HFC maintains a banking relationship with each of the Senior Trustees or
affiliates thereof and certain of the Senior Trustees are also trustees under
other indentures of HFC under which outstanding senior or subordinated unsecured
debt securities of HFC have been issued. The Senior Trustees or affiliates
thereof may also have other financial relations with HFC and other corporations
affiliated with HFC.
SENIOR SUBORDINATED DEBT SECURITIES
Offered Debt Securities which will constitute senior subordinated unsecured
debt of HFC (the "Senior Subordinated Debt Securities") will be issued under an
Indenture dated as of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee (the "Indenture for Senior Subordinated Debt Securities").
Unless a different place is specified in the Prospectus Supplement,
principal and interest, if any, on Senior Subordinated Debt Securities will be
payable at the office or agency of HFC in Chicago, Illinois; provided, however,
that payment of interest may be made at the option of HFC by check or draft
mailed to the person entitled thereto.
Subordination
Senior Subordinated Debt Securities are subordinate and junior in right of
payment to all indebtedness for borrowed money of HFC, whenever outstanding,
which is not by its terms subordinate and junior to other indebtedness of HFC,
such indebtedness of HFC to which the Senior Subordinated Debt Securities are
subordinate and junior being hereinafter called "senior indebtedness." At June
30, 1998, the aggregate amount of the outstanding senior indebtedness of HFC was
approximately $23.4 billion, including the impact of the Beneficial merger. HFC
is not directly limited in its ability to issue additional senior indebtedness.
In the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings in
connection therewith, relative to HFC or to its creditors, as such, or to its
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property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of HFC, whether or not involving insolvency or
bankruptcy, then the holders of senior indebtedness shall be entitled to receive
payment in full of all principal and interest on all senior indebtedness before
the holders of the Senior Subordinated Debt Securities are entitled to receive
any payment on account of principal or interest upon the Senior Subordinated
Debt Securities, and to that end (but subject to the power of a court of
competent jurisdiction to make other equitable provision reflecting the rights
conferred in the Indentures for Senior Subordinated Debt Securities upon the
senior indebtedness and the holders thereof with respect to the subordinated
indebtedness represented by the Senior Subordinated Debt Securities and the
holders thereof by a lawful plan of reorganization under applicable bankruptcy
law) the holders of senior indebtedness shall be entitled to receive for
application in payment thereof any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable or
deliverable in any such proceedings in respect of the Senior Subordinated Debt
Securities, except securities which are subordinate and junior in right of
payment to the payment of all senior indebtedness then outstanding.
In the event that any Senior Subordinated Debt Security is declared or
becomes due and payable before its expressed maturity because of the occurrence
of a default under the Indenture for Senior Subordinated Debt Securities (under
circumstances when the provisions of the foregoing paragraph shall not be
applicable), the holders of the senior indebtedness outstanding at the time such
Senior Subordinated Debt Security so becomes due and payable because of such
occurrence of such default shall be entitled to receive payment in full of all
principal and interest on all senior indebtedness before the holders of the
Senior Subordinated Debt Securities are entitled to receive any payment on
account of the principal or interest upon the Senior Subordinated Debt
Securities.
Without limiting the foregoing, no payment of principal, premium or
interest shall be made upon the Senior Subordinated Debt Securities during the
continuance of any default in the making of any required payment under any
sinking fund or analogous fund created for the benefit of any senior
indebtedness or any other default in the payment of principal of, or interest
on, any senior indebtedness then outstanding, whether by lapse of time, by
declaration, by call or notice of prepayment or otherwise. (Indenture for Senior
Subordinated Debt Securities -- Section 12.01)
Liens
HFC will not create, assume, incur or suffer to exist any mortgage, pledge
or other lien on any of the property or assets of HFC whether now owned or
hereafter acquired for the purpose of securing any senior subordinated
indebtedness or junior subordinated indebtedness, as defined. (Indenture for
Senior Subordinated Debt Securities -- Section 3.08)
Concerning the Trustee
Harris Trust and Savings Bank is trustee under other indentures of HFC
under which certain of HFC's outstanding senior subordinated debt securities
have been issued and under which HFC senior debt securities may be issued. HFC
maintains banking relationships with Harris Trust and Savings Bank. Harris Trust
and Savings Bank, or affiliates thereof, also have other financial relations
with HFC and other corporations affiliated with HFC.
SATISFACTION, DISCHARGE, AND DEFEASANCE OF THE INDENTURES AND DEBT SECURITIES
If there is deposited irrevocably with the Trustee as trust funds for the
benefit of the holders of Debt Securities of a particular series an amount, in
money or the equivalent in securities of the United States or securities the
principal of and interest on which is fully guaranteed by the United States,
sufficient to pay the principal, premium, if any, and interest, if any, on such
series of Debt Securities on the dates such payments are due in accordance with
the terms of such series of Debt Securities through their maturity, and if HFC
has paid or caused to be paid all other sums payable by it under the applicable
Indenture with respect to such series, then HFC will be deemed to have satisfied
and discharged the entire indebtedness represented by such series of Debt
Securities and all of the obligations of HFC under such Indenture with respect
to such series,
8
<PAGE> 10
except as otherwise provided in such Indenture. In the event of any such
defeasance, holders of such Debt Securities would be able to look only to such
trust funds for payment of principal, premium, if any, and interest, if any, on
their Debt Securities. (Standard Provisions -- Section 6.03, Indenture for
Senior Subordinated Debt Securities -- Section 6.03)
For federal income tax purposes, any such defeasance may be treated as a
taxable exchange of the related Debt Securities for an issue of obligations of
the trust or a direct interest in the cash and securities held in the trust. In
that case holders of such Debt Securities would recognize gain or loss as if the
trust obligations or the cash or securities deposited, as the case may be, had
actually been received by them in exchange for their Debt Securities. Such
holders thereafter would be required to include in income a share of the income,
gain or loss of the trust. The amount so required to be included in income could
be a different amount than would be includable in the absence of defeasance.
Prospective investors are urged to consult their own tax advisors as to the
specific consequences to them of defeasance.
MODIFICATION OF INDENTURES
Each Indenture provides that the holders of not less than a majority in
principal amount of each series of Debt Securities at the time outstanding under
such Indenture may enter into supplemental indentures for the purpose of
amending, in any manner, provisions of the Indenture or of any supplemental
indenture or modifying the rights of holders of such series of Debt Securities.
However, no such supplemental indenture, without the consent of the holder of
each outstanding Debt Security affected thereby, shall, among other things, (i)
change the maturity of the principal of, or any installment of interest on any
Debt Security, or reduce the principal amount thereof or the interest thereon or
any premium payable upon the redemption thereof, or (ii) reduce the aforesaid
percentage of the Debt Securities, the consent of the holders of which is
required for the execution of any such supplemental indenture or for any waiver
of compliance with any covenant or condition in such Indenture. (Standard
Provisions -- Section 11.02, Indenture for Senior Subordinated Debt Securities
- -- Section 11.02)
Each Indenture may be amended or supplemented without the consent of any
holder of Debt Securities under certain circumstances, including (i) to cure any
ambiguity, defect or inconsistency in the Indenture, any supplemental indenture,
or in the Debt Securities of any series; (ii) to evidence the succession of
another corporation to the Company and to provide for the assumption of all the
obligations of the Company under the Debt Securities and the Indenture by such
corporation; (iii) to provide for uncertificated Debt Securities in addition to
certificated Debt Securities; (iv) to make any change that does not adversely
affect the rights of holders of Debt Securities issued thereunder; (v) to
provide for a new series of Debt Securities; or (vi) to add to rights of holders
of Debt Securities or add additional Events of Default. (Standard Provisions --
Section 11.01, Indenture for Senior Subordinated Debt Securities -- Section
11.01)
SUCCESSOR ENTITY
The Company may not consolidate with or merge into, or transfer, sell or
lease its properties and assets as, or substantially as, an entirety to another
entity unless the successor entity is a corporation incorporated within the
United States and, after giving effect thereto, no default under the Indenture
shall have occurred and be continuing. Thereafter, except in the case of a
lease, all obligations of the Company under the Indenture terminate. (Standard
Provision -- Section 10.02, Indenture for Senior Subordinated Debt Securities --
Sections 10.01 and 10.02)
EVENTS OF DEFAULT
Each Indenture defines the following as Events of Default with respect to
any series of Debt Securities: default for 30 days in the payment of any
interest upon any Debt Security of such series issued under such Indenture;
default in the payment of any principal of or premium on any such Debt Security;
default for 30 days in the deposit of any sinking fund or similar payment for
such series of Debt Securities; default for 60 days after notice in the
performance of any other covenant in the Indenture; certain defaults for 30 days
after notice in the payment of principal or interest, or in the performance of
other covenants, with respect to
9
<PAGE> 11
borrowed money under another indenture in which the Trustee for such Debt
Securities is trustee which results in the principal amount of such indebtedness
becoming due and payable prior to maturity, which acceleration has not been
rescinded or annulled; and certain events of bankruptcy, insolvency or
reorganization. HFC is required to file with each Trustee annually a certificate
as to the absence of certain defaults under the Indenture. (Standard Provisions
- -- Sections 3.05 and 7.01, Indenture for Senior Subordinated Debt Securities --
Sections 3.05 and 7.01)
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, either the Trustee or the holders of
not less than 25% in principal amount of the outstanding Debt Securities of such
series by notice as provided in the Indenture may declare the principal amount
of all the Debt Securities of such series to be due and payable immediately. 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 for payment of money
has been obtained by the Trustee, the holders of not less than a majority in
principal amount of outstanding Debt Securities of such series may, under
certain circumstances, rescind or annul such declaration of acceleration.
(Standard Provisions -- Section 7.02, Indenture for Senior Subordinated Debt
Securities -- Section 7.02)
The holders of not less than a majority in principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of such series, waive any past default under the Indenture and its
consequences with respect to Debt Securities of such series, except a default
(a) in the payment of principal of (or premium, if any) or interest, if any, on
any Debt Securities of such series, or (b) in respect of a covenant or provision
of the Indenture which cannot be modified or amended without the consent of the
holder of each outstanding Debt Security of such series affected. (Standard
Provisions -- Section 7.13, Indenture for Senior Subordinated Debt Securities --
Section 7.13)
Each Indenture provides that the Trustee thereunder may withhold notice to
holders of Debt Securities of any default, except in payment of the principal of
(or premium, if any) or interest, if any, on any Debt Security issued under such
Indenture or in the payment of any sinking fund or similar payment, if it
considers it in the interest of holders of Debt Securities to do so. (Standard
Provisions -- Section 8.02, Indenture for Senior Subordinated Debt Securities --
Section 8.02)
Holders of Debt Securities may not enforce an Indenture except as provided
therein. (Standard Provisions -- Section 7.07, Indenture for Senior Subordinated
Debt Securities -- Section 7.07) Each Indenture provides that the holders of a
majority in principal amount of the outstanding debt securities issued under
such Indenture have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee. (Standard Provisions -- Section 7.12,
Indenture for Senior Subordinated Debt Securities -- Section 7.12) The Trustee
will not be required to comply with any request or direction of holders of Debt
Securities pursuant to the Indenture unless offered indemnity against costs and
liabilities which might be incurred by the Trustee as a result of such
compliance. (Standard Provisions -- Section 8.03(e), Indenture for Senior
Subordinated Debt Securities -- Section 8.03(e))
DESCRIPTION OF WARRANTS
HFC may issue, together with any Debt Securities offered by any Prospectus
Supplement or separately, Warrants for the purchase of other Debt Securities.
The Warrants are to be issued under warrant agreements (each a "Warrant
Agreement") to be entered into between HFC and a bank or trust company, as
warrant agent ("Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Warrants ("Offered Warrants"). A copy of the
forms of Warrant Agreement, including the form of warrant certificates
representing the Warrants ("Warrant Certificates"), reflecting the alternative
provisions to be included in the Warrant Agreements that will be entered into
with respect to particular offerings of Warrants, is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Warrant Agreement and the Warrant Certificates do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the Warrant Agreement and the Warrant certificates, respectively,
including the definitions therein of certain terms.
10
<PAGE> 12
GENERAL
The Prospectus Supplement describes the terms of the Offered Warrants, the
Warrant Agreement relating to the Offered Warrants and the Warrant Certificates
representing the Offered Warrants, including the following: (1) the designation,
aggregate principal amount, and terms of the Debt Securities purchasable upon
exercise of the Offered Warrants; (2) the designation and terms of any related
Debt Securities with which the Offered Warrants are issued and the number of
Offered Warrants issued with each such Debt Security; (3) the date, if any, on
and after which the Offered Warrants and the related Offered Debt Securities
will be separately transferable; (4) the principal amount of Debt Securities
purchasable upon exercise of one Offered Warrant and the price at which such
principal amount of Debt Securities may be purchased upon such exercise; (5) the
date on which the right to exercise the Offered Warrants shall commence and the
date ("Expiration Date") on which such right shall expire; (6) whether the
Warrants represented by the Warrant Certificates will be issued in registered or
bearer form, and if registered, where they may be transferred and registered;
and (7) any other terms of the Offered Warrants.
Warrant Certificates will be exchangeable on the terms specified in the
Prospectus Supplement for new Warrant Certificates of different denominations,
and Warrants may be exercised at the corporate trust office of the Warrant Agent
or any other office indicated in the Prospectus Supplement. Prior to the
exercise of their Warrants, holders of Warrants will not have any of the rights
of Holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payments of principal of, premium, if any. or interest, if any, on
the Debt Securities purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Offered Warrant will entitle the holder to purchase such principal
amount of Debt Securities at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the Prospectus Supplement relating
to the Offered Warrants by payment of such exercise price in full in the manner
specified in the Prospectus Supplement. Offered Warrants may be exercised at any
time up to the close of business on the Expiration Date set forth in the
Prospectus Supplement relating to the Offered Warrants. After the close of
business on the Expiration Date, unexercised Warrants will become void.
Upon receipt of payment of the exercise price and the Warrant Certificate
properly completed and duly executed at the corporate trust office of the
Warrant Agent or any other office indicated in the Prospectus Supplement, HFC
will, as soon as practicable, forward the Debt Securities purchasable upon such
exercise. If less than all of the Warrants represented by such Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of Warrants.
PLAN OF DISTRIBUTION
HFC may sell the Securities in any of three ways: (i) through underwriters
or dealers; (ii) directly to a limited number of purchasers or to a single
purchaser; or (iii) through agents. The Prospectus Supplement sets forth the
terms of the offering of the Offered Debt Securities and any Offered Warrants
(collectively, the "Offered Securities"), including the name or names of any
underwriters, dealers or agents, the purchase price of the Offered Securities
and the proceeds to HFC from such sale, any underwriting discounts and other
items constituting underwriters' compensation and any discounts and commissions
allowed or paid to dealers. Any initial public offering price and any discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
If the Offered Securities are sold through underwriters, the Prospectus
Supplement relating thereto describes the nature of the obligation of the
underwriters to take and pay for the Offered Securities. The Offered Securities
may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more underwriting
firms acting alone. The underwriter or underwriters with respect to a particular
underwritten offering of Offered Securities are named in the Prospectus
Supplement relating to such offering, and, if an underwriting syndicate is used,
the managing underwriter or underwriters are set forth on the cover of such
Prospectus Supplement. Unless otherwise set
11
<PAGE> 13
forth in the Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Securities will be subject to certain conditions precedent,
and the underwriters will be obligated to purchase all the Offered Securities if
any are purchased.
The Offered Securities may be sold directly by HFC or through agents
designated by HFC from time to time. Any agent involved in the offer or sale of
the Offered Securities in respect of which this Prospectus is delivered is
named, and any commissions payable by HFC to such agent are set forth, in the
Prospectus Supplement relating thereto.
Underwriters and agents who participate in the distribution of the Offered
Securities may be entitled under agreements which may be entered into with HFC
to indemnification by HFC against certain liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
which the underwriters or agents may be required to make in respect thereof.
If so indicated in the Prospectus Supplement, HFC will authorize
underwriters, dealers or other persons acting as HFC's agents to solicit offers
by certain institutions to purchase Offered Securities from HFC pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
HFC. The obligations of any purchaser under any such contract will not be
subject to any conditions except that (i) the purchase of the Offered Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject, and (ii) if the Offered
Securities are also being sold to underwriters, HFC shall have sold to such
underwriters the Offered Securities not sold for delayed delivery. The
underwriters, dealers and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
There can be no assurance that a secondary market will be created for the
Offered Securities or, if it is created, that it will continue.
ERISA MATTERS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain restrictions on employee benefit plans ("Plans") that are
subject to ERISA and on persons who are fiduciaries with respect to such Plans.
In accordance with the ERISA's general fiduciary requirements, a fiduciary with
respect to any such Plan who is considering the purchase of Offered Securities
on behalf of such Plan should determine whether such purchase is permitted under
the governing Plan documents and is prudent and appropriate for the Plan in view
of its overall investment policy and the composition and diversification of its
portfolio. Other provisions of ERISA and Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code") prohibit certain transactions between a
Plan and persons who have certain specified relationships to the Plan ("parties
in interest" within the meaning of ERISA or "disqualified persons" within the
meaning of Section 4975 of the Code). Thus, a Plan fiduciary considering the
purchase of Offered Securities should consider whether such a purchase might
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code.
The Company may be considered a "party in interest" or a "disqualified
person" with respect to many Plans that are subject to ERISA. The purchase of
Offered Securities by a Plan that is subject to the fiduciary responsibility
provisions of ERISA or the prohibited transaction provisions of Section 4975 of
the Code (including individual retirement accounts and other plans described in
Section 4975(c)(1) of the Code) and with respect to which the Company is a party
in interest or a disqualified person may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Offered
Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment finds) or PTCE 90-1 (an exemption for
certain transactions involving insurance company pooled separate
12
<PAGE> 14
accounts). ANY PENSION OR OTHER EMPLOYEE BENEFIT PLAN PROPOSING TO ACQUIRE ANY
OFFERED SECURITIES SHOULD CONSULT WITH ITS COUNSEL.
LEGAL OPINIONS
The legality of the Offered Securities will be passed upon for HFC by John
W. Blenke, Vice President -- Corporate Law for Household International, Inc.,
the parent of HFC. Certain legal matters will be passed upon for underwriters
and agents by McDermott, Will & Emery, Chicago, Illinois. Mr. Blenke is a
full-time employee and an officer of Household International and owns, and holds
options to purchase, shares of Common Stock of Household International.
EXPERTS
The financial statements and schedules of HFC and its subsidiaries
incorporated by reference in this Prospectus, to the extent and for the periods
indicated in its reports, have been audited by Arthur Andersen LLP, independent
public accountants, and are incorporated by reference herein in reliance upon
the authority of said firm as experts in giving said reports.
The financial statements of Beneficial Corporation for the year ended
December 31, 1997 incorporated in this Prospectus by reference from HFC's
Current Reports on Form 8-K as filed on June 2, 1998 and June 30, 1998 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
13
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated Expenses:
<TABLE>
<S> <C>
Printing & Engraving Fees................................... $ 250,000
Fees of Transfer Agent and Registrar........................ 50,000
Accountants' Fees and Expenses.............................. 75,000
Blue Sky Qualification Fees and Expenses.................... 5,000
SEC Filing Fee.............................................. 885,000*
Rating Agency Fees.......................................... 1,500,000
Legal Fees and Expenses..................................... 10,000
Miscellaneous............................................... 25,000
----------
Total.................................................. $2,800,000
==========
</TABLE>
- -------------------------
*Actual
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1+ Form of Underwriting Agreement for Debt Securities and
Warrants to Purchase Debt Securities.
4.1 Standard Multiple-Series Indenture Provisions for Senior
Debt Securities dated as of June 1, 1992. (Incorporated
herein by reference from Exhibit 4(b) to HFC's Registration
Statement on Form S-3 (No. 33-48854)).
4.2 Indenture for Senior Subordinated Debt Securities, dated as
of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee. (Incorporated herein by reference from
Exhibit 4(e) to HFC's Registration Statement on Form S-3
(No. 33-38955)).
4.3 Indenture for Senior Debt Securities between HFC and U.S.
Bank Trust National Association formerly known as First
Trust of Illinois, National Association, successor in
interest to Bank of America Illinois, formerly known as
Continental Bank, National Association, as Trustee, dated as
of October 1, 1992. (Incorporated herein by reference from
Exhibit 4(d) to HFC's Registration Statement on Form S-3
(No. 33-55043)).
4.4 Indenture for Senior Debt Securities, dated as of November
1, 1994, between HFC and The Bank of New York, successor in
interest to NationsBank of Tennessee, as Trustee.
(Incorporated by reference from Exhibit 4(e) to HFC's
Registration Statement on Form S-3 (No. 33-64175)).
4.5 Indenture for Senior Debt Securities, dated as of April 1,
1995, between HFC and The First National Bank of Chicago, as
Trustee. (Incorporated by reference from Exhibit 4(f) to
HFC's Registration Statement on Form S-3 (No. 33-64175)).
4.6+ Form of Indenture for Senior Debt Securities, between HFC
and Harris Trust and Savings Bank, as Trustee.
4.7+ Form of Indenture for Senior Debt Securities, between HFC
and The First National Bank of Maryland, as Trustee.
4.8+ Form of Indenture with respect to Senior Debt Securities.
4.9+ Forms of Warrant Agreement, including forms of Warrant
Certificate.
5+ Opinion and Consent of Mr. J. W. Blenke, Vice President --
Corporate Law and Assistant Secretary of Household
International, Inc.
12 Statement on the Computation of Ratio of Earnings to Fixed
Charges and to Combined Fixed Charges and Preferred Stock
Dividends.
</TABLE>
II-1
<PAGE> 16
<TABLE>
<C> <S>
23.1 Consent of Arthur Andersen LLP, Certified Public
Accountants.
23.2+ Consent of Deloitte & Touche LLP, Certified Public
Accountants.
23.3+ Consent of Mr. J. W. Blenke, Vice President-Corporate Law
and Assistant Secretary of Household International, Inc., is
contained in his opinion (Exhibit 5).
24+ Power of Attorney.
25.1+ Statement of eligibility and qualification of The First
National Bank of Chicago.
25.2+ Statement of eligibility and qualification of Harris Trust
and Savings Bank.
25.3+ Statement of eligibility and qualification of U.S. Bank
Trust National Association.
25.4+ Statement of eligibility and qualification of The Bank of
New York.
25.5+ Statement of eligibility and qualification of The First
National Bank of Maryland.
</TABLE>
- -------------------------
+Filed previously.
II-2
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Prospect Heights, and
State of Illinois, on the 1st day of September, 1998.
HOUSEHOLD FINANCE CORPORATION
By: *
------------------------------------
G.D. Gilmer
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on the 1st day of September, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* President and Chief Executive Officer, Director
- ---------------------------------------------------
(G.D. Gilmer)
* Vice President-Chief Financial Officer, Chief
- --------------------------------------------------- Accounting Officer, Director
(D. A. Schoenholz)
* Director
- ---------------------------------------------------
(W. F. Aldinger)
* Director
- ---------------------------------------------------
(G.O. Fick)
*By: /s/ PATRICK D. SCHWARTZ
---------------------------------------------
(Patrick D. Schwartz)
Attorney-in-fact
</TABLE>
The Registrant reasonably believes that the security rating to be assigned
to the Securities registered hereunder will make the Securities "investment
grade securities" pursuant to Transaction Requirement B.2 of Form S-3.
II-3
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
- ------- --------------------
<C> <S>
1+ Form of Underwriting Agreement for Debt Securities and
Warrants to Purchase Debt Securities.
4.1 Standard Multiple-Series Indenture Provisions for Senior
Debt Securities dated as of June 1, 1992. (Incorporated
herein by reference from Exhibit 4(b) to HFC's Registration
Statement on Form S-3 (No. 33-48854)).
4.2 Indenture for Senior Subordinated Debt Securities, dated as
of March 15, 1990, between HFC and Harris Trust and Savings
Bank, as Trustee. (Incorporated herein by reference from
Exhibit 4(e) to HFC's Registration Statement on Form S-3
(No. 33-38955)).
4.3 Indenture for Senior Debt Securities between HFC and U.S.
Bank Trust national Association formerly known as First
Trust of Illinois, National Association, successor in
interest to Bank of America Illinois, formerly known as
Continental Bank, National Association, as Trustee, dated as
of October 1, 1992. (Incorporated herein by reference from
Exhibit 4(d) to HFC's Registration Statement on Form S-3
(No. 33-55043)).
4.4 Indenture for Senior Debt Securities, dated as of November
1, 1994, between HFC and The Bank of New York, successor in
interest to NationsBank of Tennessee, as Trustee.
(Incorporated by reference from Exhibit 4(e) to HFC's
Registration Statement on Form S-3 (No. 33-64175)).
4.5 Indenture for Senior Debt Securities, dated as of April 1,
1995, between HFC and The First National Bank of Chicago, as
Trustee. (Incorporated by reference from Exhibit 4(f) to
HFC's Registration Statement on Form S-3 (No. 33-64175)).
4.6+ Form of Indenture for Senior Debt Securities, between HFC
and Harris Trust and Savings Bank, as Trustee.
4.7+ Form of Indenture for Senior Debt Securities, between HFC
and The First National Bank of Maryland, as Trustee.
4.8+ Form of Indenture with respect to Senior Debt Securities.
4.9+ Forms of Warrant Agreement, including forms of Warrant
Certificate.
5+ Opinion and Consent of Mr. J. W. Blenke, Vice President --
Corporate Law and Assistant Secretary of Household
International, Inc.
12 Statement on the Computation of Ratio of Earnings to Fixed
Charges and to Combined Fixed Charges and Preferred Stock
Dividends.
23.1 Consent of Arthur Andersen LLP, Certified Public
Accountants.
23.2+ Consent of Deloitte & Touche LLP, Certified Public
Accountants.
23.3+ Consent of Mr. J. W. Blenke, Vice President-Corporate Law
and Assistant Secretary of Household International, Inc., is
contained in his opinion (Exhibit 5).
24+ Power of Attorney.
25.1+ Statement of eligibility and qualification of The First
National Bank of Chicago.
25.2+ Statement of eligibility and qualification of Harris Trust
and Savings Bank.
25.3+ Statement of eligibility and qualification of U.S. Bank
Trust National Association.
25.4+ Statement of eligibility and qualification of The Bank of
New York.
25.5+ Statement of eligibility and qualification of The First
National Bank of Maryland.
</TABLE>
- -------------------------
+ Filed previously
II-4
<PAGE> 1
EXHIBIT 12
HOUSEHOLD FINANCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(All dollar amounts are stated in millions)
<TABLE>
<CAPTION>
Six Months
Ended
June 30, Year Ended December 31,
-------------------- --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- ---------- -------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing operations $ (203.7) $ 393.8 $ 767.1 $ 650.0 $ 412.3 $ 434.1 $ 406.4
Income taxes 64.6 222.3 391.9 358.1 295.3 252.0 236.6
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before income taxes (139.1) 616.1 1,159.0 1,008.1 707.6 686.1 643.0
Fixed charges:
Interest expense (1) 1,018.3 926.2 1,863.0 1,727.9 1,675.9 1,330.2 1,166.1
Interest portion of rentals (2) 25.6 22.8 46.8 45.2 37.1 24.9 20.7
--------- --------- --------- --------- --------- --------- ---------
Total fixed charges 1,043.9 949.0 1,909.8 1,773.1 1,713.0 1,355.1 1,186.8
Total earnings as defined $ 904.8 $1,565.1 $3,068.8 $2,781.2 $2,420.6 $2,041.2 $1,829.8
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to fixed charges (3) 0.87 1.65 1.61 1.57 1.41 1.51 1.54
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to final charges,
excluding merger and integration
related costs 1.82 - - - - - -
========= ========= ========= ========= ========= ========= =========
Preferred stock dividends (4) $ - $ 5.6 $ 14.6 $ 19.4 $ 21.3 $ 19.6 $ 21.7
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to combined fixed
charges and preferred stock dividends (3) 0.87 1.64 1.59 1.55 1.40 1.48 1.51
========= ========= ========= ========= ========= ========= =========
Ratio of earnings to combined fixed charges
and preferred stock dividends, excluding
merger and integration related costs 1.82 - - - - - -
========= ========= ========= ========= ========= ========= =========
</TABLE>
(1) For financial statement purposes, these amounts are reduced for income
earned on temporary investment of excess funds, generally resulting from
over-subscriptions of commercial paper issuances.
(2) Represents one-third of rentals, which approximates the portion
representing interest.
(3) The ratios at June 30, 1998, have been negatively impacted by the one-time
merger and integration costs associated with Household's merger with
Beneficial Corporation. As a result, ratios excluding these costs have
also been presented for comparative purposes. The dollar amount of the
coverage deficiency due to the one-time merger and integration related
costs was $139.1 million.
(4) Preferred stock dividends are grossed up to pre-tax equivalents.
<PAGE> 1
[ARTHUR ANDERSEN LLP LETTERHEAD]
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household Finance Corporation:
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-3 relating to the offering
of up to $3,000,000,000 of Debt Securities and Warrants to Purchase Debt
Securities, filed with the Securities and Exchange Commission on August 3, 1998,
as amended by Amendment No. 1 thereto, to be filed on or about September 1,
1998, of our report dated June 30, 1998, included in Household Finance
Corporation's Form 8-K dated September 1, 1998, and to all references to our
Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
September 1, 1998
