Pricing Supplement No. 18 dated July 9, 1998
(To Prospectus dated April 3, 1998)
HOUSEHOLD FINANCE CORPORATION
Medium Term Notes
Due Nine Months or More from Date of Issue
Principal Amount: $600,000,000
Price to Public: 99.965%
Proceeds to HFC: 99.565% plus accrued interest,
if any,
from July 15, 1998
Settlement Date: July 15, 1998
Stated Maturity: July 15, 2012
Initial Interest Rate: Prior to July 15, 2002, 6 1/8%;
on and
after July 15, 2002, see
"Supplemental
Description of the
Notes--Interest Rate and
Interest Payment Dates" below.
Interest Payment Dates: Semi-annually on the 15th day of
January
and July of each year. If any
of said days
is not a Business Day, payments
shall be
made on the next succeeding
Business
Day.
Regular Record Date: The date fifteen (15) calendar
days
(whether or not a Business Day)
prior to
each Interest Payment Date or
the Stated
Maturity, as the case may be.
Call Option: The Notes may be called by the
Callholder
prior to maturity, as described
in
"Supplemental Description of the
Notes--
Call Option; Put Option" below.
Repayment/Put Option: The Notes may be required to be
repaid
pursuant to the Put Option prior
to
maturity as described in
"Supplemental
Description of the Notes--Call
Option; Put
Option" below.
Agents: Warburg Dillon Read LLC:
$300,000,000
Chase Securities, Inc.:
$300,000,000
Agents' Commission or Discount: .40%
Calculation Agent: Chase Securities, Inc.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE NOTES (AS DEFINED BELOW). SUCH TRANSACTIONS MAY
INCLUDE STABILIZING THE PURCHASE OF NOTES TO COVER SYNDICATE
SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING" IN THIS PRICING
SUPPLEMENT AND "OFFERING OF MEDIUM TERM NOTES AND WARRANTS" IN
THE PROSPECTUS.
ADDITIONAL TERMS
The Notes offered hereby are described in the Prospectus dated
April 3, 1998 (the
"Prospectus") and this Pricing Supplement. The description of the
particular terms of the Notes
set forth in this Pricing Supplement supplements, and to the extent
inconsistent therewith
replaces, the description of the terms and provisions of the
"Description of Medium Term Notes"
in the Prospectus. Capitalized terms used but not defined herein
shall have the meanings given
such terms in such Prospectus.
These Additional Terms constitute a part of the Pricing
Supplement, dated July 9, 1998,
of Household Finance Corporation (the "Company") and contains a
description of additional
terms and provisions applicable to the Medium Term Notes due July
15, 2012 ("Notes") of the
Company, which represent a part of the series of Medium Term Notes
Due Nine Months or More
from Date of Issue of the Company. The Notes are described in the
Prospectus for the Medium
Term Notes Due Nine Months or More from Date of Issue referenced
above, and reference is
made thereto for a detailed summary of additional provisions of the
Notes. The Notes are Fixed
Rate Notes as described in the Prospectus, subject to and as
modified by the Coupon Reset
Process (as defined below) and other provisions described in the
Pricing Supplement. The
following description of the terms of the Notes supplements and, to
the extent inconsistent
therewith, replaces, the description of the general terms of the
Notes (as defined in the Indenture
(as defined below)) set forth in the Prospectus, to which
description reference is made.
SUPPLEMENTAL DESCRIPTION OF THE NOTES
Interest Rate and Interest Payment Dates
The Notes will bear interest at the rate of 6 1/8% per annum
from the date of issuance
to July 15, 2002 (the "Coupon Reset Date"). If a Callholder (as
defined below) elects to
purchase an applicable principal amount of Notes pursuant to its
Call Option (as defined below),
the Calculation Agent (as defined below) will reset the interest
rate effective on the Coupon
Reset Date, pursuant to the Coupon Reset Process described below.
In such circumstance, (i)
the applicable principal amount of Notes will be purchased by the
Callholder, in whole but not
in part, at 100% of the principal amount thereof on the Coupon
Reset Date, on the terms and
subject to the conditions described herein, and (ii) on and after
the Coupon Reset Date, the
Notes will bear interest at the rate (the "Coupon Reset Rate")
determined by the Calculation
Agent in accordance with the procedures set forth below (the
"Coupon Reset Process"). See
"Coupon Reset Process" below.
If a Callholder for any reason does not purchase its
applicable principal amount of Notes
on the Coupon Reset Date, the Trustee (as defined below) will be
required pursuant to the terms
of such Notes to exercise the Put Option (as defined below) without
the consent of, or notice to,
the holders of such Notes and, upon such exercise, the Company will
be required on the Coupon
Reset Date to repurchase such Notes from the holders thereof at
100% of the principal amount
thereof. See "Call Option; Put Option" below.
Interest will be payable on the Notes semi-annually on January
15 and July 15 of each
year (each, an "Interest Payment Date"), commencing January 15,
1999, to the persons in whose
name the Notes are registered on the fifteenth calendar day
(whether or not a Business Day (as
defined below)) immediately preceding the related Interest Payment
Date (each, a "Record
Date"). Interest will be calculated based on a 360-day year
consisting of twelve 30-day months.
"Business Day" means any day other than a Saturday, a Sunday or a
day on which banking
institutions in The City of New York are authorized or obligated by
law, executive order or
governmental decree to be closed.
Maturity Date
The Notes will mature on July 15, 2012 (the "Final Maturity
Date"). On the Coupon
Reset Date (or if such date is not a Business Day, the next
Business Day), the holders of the
Notes will be entitled to receive 100% of the principal amount
thereof from either (i) the
exercise by a Callholder of the Call Option or (ii) in the event a
Callholder does not exercise
its Call Option or fails for any reason to pay the Call Price (as
defined below) to the Trustee
when required, the exercise by the Trustee for and on behalf of the
holders of the Notes of the
Put Option. The Trustee will exercise the Put Option without the
consent of, or notice to, the
holders of the Notes.
The principal amount of Notes will be $600,000,000 (the
"Principal Amount") and the
Notes will be issuable only in registered form.
Global Notes
The Notes will initially be represented by global securities
deposited with, or on behalf
of, The Depository Trust Company ("DTC") and will not be issued as
individual definitive
securities to their purchasers. Consequently, unless and until
such individual definitive securities
are issued, such purchaser will not be recognized as holders of the
Notes under the Indenture,
dated as of December 1, 1993, between the Company and The Chase
Manhattan Bank (the
"Trustee") (the "Indenture") and DTC will be the sole holder for
all purposes under the
Indenture and the Notes. Hence, until such time, such purchasers
will only be able to exercise
the rights of holders of the Notes indirectly through DTC and its
respective participating
organizations and, as a result, the ability of any such purchaser
to pledge the Notes to persons
or entities that do not participate in DTC's system, or to
otherwise act with respect to the Notes,
may be limited. See "Description of Medium Term Notes--Book-Entry
Notes" in the
accompanying Prospectus.
Call Option; Put Option
The "Callholder" will be UBS AG, London Branch with respect to
$300,000,000
principal amount of the Notes and Chase Securities, Inc. with
respect to $300,000,000 principal
amount of the Notes. Pursuant to the terms of the Notes, each
Callholder has the right to
purchase the applicable principal amount of Notes, in whole but not
in part, on the Coupon
Reset Date (the "Call Option"), at a price equal to 100% of the
principal amount thereof (the
"Call Price"), by giving notice to the Trustee (the "Call Notice").
In the event a Callholder
exercises its Call Option, then (i) not later than 2:00 p.m. New
York time on the Business Day
prior to the Coupon Reset Date, such Callholder shall deliver the
Call Price in immediately
available funds to the Trustee for payment of the Call Price on the
Coupon Reset Date and (ii)
the holders of the applicable principal amount of Notes shall be
required to deliver such Notes
to the Callholder against payment therefor on the Coupon Reset Date
through the facilities of
DTC. Such Call Notice shall be given to the Trustee, in writing,
no later than 15 calendar days
prior to the Coupon Reset Date. In the event that less than all of
the Notes are subject to the
exercise of the Call Option, the Trustee shall select by lot, or in
any manner it shall deem fair,
the Notes to be so called.
If a Callholder elects to exercise the Call Option, the
obligation of such Callholder to pay
the Call Price is subject to the conditions precedent that, (i) at
any time prior to the sale of the
Notes on the Bid Date (as defined below), no Event of Default (as
defined in the Indenture), or
any event which, with the given of notice or passage of time, or
both would constitute an Event
of Default, with respect to the Notes shall have occurred and be
continuing; (ii) any event of
default, as defined in any mortgage, indenture agreement or
instrument under which there may
be issued, or by which there may be secured or evidenced, any
indebtedness for borrowed
money having an outstanding principal amount of at least
$50,000,000 shall have occurred and
shall have resulted in such indebtedness becoming or being declared
due and payable, and such
acceleration shall not have been rescinded or annulled; (iii) no
Market Disruption Event (as
defined below) shall have occurred; and (iv) at least three Dealers
(as defined below) shall have
provided timely Bids (as defined below) in the manner described
under "Coupon Reset Process."
No holder of Notes shall have any rights or claims against a
Callholder as a result of the
Callholder not purchasing the Notes.
If the applicable Call Option has not been exercised, or in
the event the applicable
Callholder is not required or fails to deliver the Call Price with
respect to the applicable
principal amount of Notes to the Trustee not later than 2:00 p.m.
New York time on the
Business Day prior to the Coupon Reset Date, the Trustee will be
required for and on behalf of
the holders of such Notes to exercise the option to put such Notes
to the Company pursuant to
the Put Option under the terms of such Notes (the "Put Option").
Upon exercise of the Put
Option, the Company will be required to purchase such Notes on the
Coupon Reset Date, at a
purchase price equal to 100% of the entire principal amount thereof
(the "Put Redemption
Price"). The Put Option will be exercised automatically by the
Trustee, on behalf of the holders
of such Notes, if the Call Option has not been exercised. No
holder has the right to consent or
object to the Trustee's duty to exercise the Put Option. If the
Trustee exercises the Put Option,
the Company will deliver the Put Redemption Price to the Trustee,
together with the accrued
and unpaid interest due on the Coupon Reset Date, by no later than
12:00 noon New York time
on the Coupon Reset Date (or if such date is not a Business Day,
the next Business Day) and
the holders of such Notes will be required to deliver such Notes to
the Company against payment
therefor on the Coupon Reset Date through the facilities of DTC.
Coupon Reset Process
Chase Securities, Inc. has been appointed the "Calculation
Agent" for the Notes. If a
Callholder for the applicable principal amount of Notes has
exercised the Call Option as set forth
above under "Call Option; Put Option," the Company and the
Calculation Agent shall complete
the following steps in order to determine the interest rate to be
paid on such Notes from and
including such Coupon Reset Date to the Final Maturity Date. The
Company and the
Calculation Agent shall use reasonable efforts to cause the actions
contemplated below to be
completed in as timely a manner as possible.
(a) The Company shall provide the Calculation Agent with a
list (the "Dealer List"), no
later than five Business Days prior to the Coupon Reset Date,
containing the names and
addresses of five dealers, one of which shall be Warburg Dillon
Read LLC in the event UBS
AG, London Branch exercises its Call Option and one of which shall
be Chase Securities, Inc.
in the event Chase Securities, Inc. exercises its Call Option, from
which it desires the
Calculation Agent to obtain the Bids (as defined below) for the
purchase of the applicable Notes.
(b) Within one Business Day following receipt by the
Calculation Agent of the Dealer
List, the Calculation Agent shall provide to each dealer (each, a
"Dealer") on the Dealer List
(i) the name of the Company, (ii) a copy of the Pricing supplement
dated July 9, 1998 relating
to the offering of the Notes, which includes the Prospectus dated
April 3, 1998, (iii) a copy of
the form of Notes and (iv) a written request that each Dealer
submit a Bid to the Calculation
Agent by 12:00 noon New York time (the "Bid Deadline") on the third
Business Day prior to
the Coupon Reset Date (the "Bid Date"). "Bid" shall mean an
irrevocable written offer given
by a Dealer for the purchase settling on the Coupon Reset Date, and
shall be quoted by such
Dealer as a stated yield to maturity on the applicable Notes (the
"Yield to Maturity"). Each
Dealer shall be provided with (i) an estimate of the Purchase Price
(as defined below) (which
shall be stated as a United States dollar amount and be calculated
by the Calculation Agent in
accordance with clause (c) below), (ii) the principal amount and
maturity of such Notes and (iii)
the method by which interest will be calculated on such Notes.
(c) The purchase price to be paid by any Dealer for the
applicable Notes (the "Purchase
Price") shall be equal to (i) the principal amount of such Notes
plus (ii) a premium (the "Notes
Premium") which shall be equal to the excess, if any, of (A) the
discounted present value to the
Coupon Reset Date of a United States Treasury security with a
maturity of July 15, 2012 which
has an interest rate of 5.20%, semi-annual interest payments on
each January 15th and July 15th,
commencing July 15, 2002, and the applicable principal amount of
such Notes, and assuming
a discount rate equal to the Treasury Rate (as defined below) over
(B) the applicable principal
amount of such Notes. "Treasury Rate" means the per annum rate
equal to the offer side yield
to maturity of the current on-the-run 10-year United States
Treasury Security per Telerate page
500 at 11:00 a.m. New York time on the Bid Date (or such other date
that may be agreed upon
by the Company and the Calculation Agent), or, if such rate does
not appear on Telerate page
500 at such time, the rates on GovPx End-of-Day Pricing at 3:00
p.m. New York time on the
Bid Date.
(d) Following the receipt of the Bids, the Calculation Agent
shall provide written notice
to the Company, setting forth (i) the names of each of the Dealers
from whom the Calculation
Agent received Bids on the Bid Date, (ii) the Bid submitted by each
such Dealer and (iii) the
Purchase Price as determined pursuant to paragraph (c) hereof.
Except as provided below, the
Calculation Agent shall thereafter select from the Bids received
the Bid with the lowest Yield
to Maturity (the "Selected Bid") and establish the Coupon Reset
Rate equal to the interest rate
which would amortize the Notes Premium fully over the remaining
term of the applicable Notes
at the Yield to Maturity indicated by the Selected Bid, provided,
however, that if any two or
more of the lowest Bids submitted are equivalent, the Company shall
in its sole discretion select
any of such equivalent Bids (and such selected Bid shall be the
Selected Bid).
(e) Immediately after calculating the Coupon Reset Rate, the
Calculation Agent shall
provide written notice to the Company and the Trustee setting forth
such Coupon Reset Rate.
The Company shall thereafter establish the Coupon Reset Rate as the
new interest rate on the
applicable Notes, effective from and including the Coupon Rest
Date, by delivery to the Trustee
on or before the Coupon Reset Date of an Officers' Certificate.
(f) The applicable Callholder shall sell the applicable Notes
to the Dealer that made the
Selected Bid at the Purchase Price, such sale to be settled on the
Coupon Reset Date in
immediately available funds.
If the Calculation Agent determines that (i) at any time prior
to the sale of the applicable
Notes on the Bid Date, an Event of Default or any event which, with
the giving of notice or the
passage of time, or both, would constitute an Event of Default with
respect to the Notes, shall
have occurred and be continuing, (ii) any event of default, as
defined in any mortgage, indenture
agreement or instrument under which there may be issued, or by
which there may be secured
or evidenced, any indebtedness for borrowed money having an
outstanding principal amount of
at least $50,000,000 shall have occurred and shall result in such
indebtedness becoming or being
declared due and payable, and such acceleration shall not have been
rescinded or annulled, (iii)
a Market Disruption Event has occurred or (iv) three or more of the
Dealers have failed to
provide Bids in a timely manner substantially as provided above,
each Call Option will
automatically terminate, and the Trustee will exercise the Put
Option on behalf of the holders.
"Market Disruption Event" shall mean any of the following events if
any such event occurs on
any day from and including 15 calendar days prior to the Coupon
Reset Date to and including
the Bid Date: (i) a suspension or material limitation in trading
in securities generally on the
New York Stock Exchange; (ii) a general moratorium on commercial
banking activities in New
York declared by either federal or New York State authorities; or
(iii) an outbreak or material
escalation of hostilities or the declaration by the United States
of America of a national
emergency or war.
The Notes provide that the Calculation Agent may resign at any
time as Calculation
Agent, such resignation to be effective ten Business Days after the
delivery to the Company and
the Trustee of notice of such resignation. In such case, the
Company may appoint a successor
Calculation Agent.
The Calculation Agent, in its individual capacity, may buy,
sell, hold and deal in Notes
and may exercise any vote or join in any action that any holder of
Notes may be entitled to
exercise or take as if it were not the Calculation Agent. The
Calculation Agent, in its individual
capacity, may also engage in any transaction with the Company as if
it were not the Calculation
Agent.
CERTAIN UNITED FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain United States federal
income tax considerations
relating to the purchase, ownership and disposition of the Notes by
an initial holder of Notes
who purchases the Notes at the time of issue. This summary is
based upon laws, regulations,
rulings and decisions currently in effect, all of which are subject
to change. The discussion does
not deal with all United States federal tax considerations
applicable to all categories of investors,
some of which may be subject to special rules. In addition, this
summary is limited to investors
who will hold the Notes as "capital assets" (generally, property
held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code").
Investors are urged to consult their own tax advisors to
determine the United States
federal, state, local, foreign and other tax consequences relating
to the purchase, ownership
and disposition of the Notes.
Prospective investors should note that no rulings have been or
are expected to be sought
from the Service with respect to any of the United States federal
income tax considerations
discussed below, and no assurance can be given that the Service
will not take contrary positions.
Treatment of Notes
Although there are no precedents directly applicable to
instruments such as the Notes,
the Company intends to treat the Notes as fixed rate debt
instruments that mature on the Coupon
Reset Date. Based on such treatment, each holder should include in
income the interest paid or
accrued on the Notes in accordance with its usual method of
accounting. Upon the sale,
exchange, redemption or other disposition by a holder of Notes, the
holder should recognize
capital gain or loss equal to the difference between the amount
realized from the disposition of
the Notes (exclusive of amounts attributable to the payment of
accrued interest not previously
included in income, which will be taxable as ordinary income) and
the holder's adjusted tax
basis in the Notes at the time of the sale, exchange, redemption or
other dispositions. A
holder's adjusted tax basis in Notes generally will equal the
holder's purchase price for such
Notes. Pursuant to recently enacted legislation, in the case of a
holder who is an individual, any
capital gain recognized on the disposition of the Notes will
generally be subject to United States
federal income tax at a rate of (i) 20%, if the holder's holding
period in the Notes was more
than 18 months at the time of such sale, exchange, redemption or
other disposition, or (ii) 28%,
if the holder's holding period in such Notes was more than one
year, but not more than 18
months, at the time of such sale, exchange, redemption or other
disposition. The ability to use
capital losses to offset ordinary income in determining taxable
income is generally limited.
It is possible that the Service could contend that the Notes
mature on the Final Maturity
Date rather than the Coupon Reset Date. Because of the Coupon
Reset Process, if the Notes
were treated as maturing on the Final Maturity Date, holders would
be subject to certain
Treasury Regulations dealing with contingent debt obligations (the
"Contingent Debt
Regulations"). Under the Contingent Debt Regulations, each holder
would be required
(regardless of such holder's usual method of accounting) to include
in income original issue
discount for each interest accrual period in an amount equal to the
product of the adjusted issue
price of the Notes at the beginning of each interest accrual period
and a projected yield to
maturity of the Notes. The projected yield to maturity would be
based on the "comparable
yield" (i.e., the yield at which the company would issue a fixed
rate debt instrument maturing
on the Final Maturity Date, with terms and conditions otherwise
similar to those of the Notes).
It is possible, under such circumstances, that holders of the Notes
could be required to recognize
ordinary income in advance of the receipt of cash payments
attributable to such income. In
addition, if the Contingent Debt Regulations applied, any gain
recognized on the sale of Notes
would be treated as interest income, while any losses would
generally be ordinary to the extent
of previously accrued original issue discount, and any excess would
be capital loss. The ability
to use capital losses to offset ordinary income in determining
taxable income is generally limited.
Foreign Holders of Notes
Interest paid to a holder (a "Foreign Holder") that is not a
United States person (as
defined below) generally will not be subject to the 30% withholding
tax generally imposed with
respect to United States source interest paid to such persons,
provided that such holder is not
engaged in a trade or business in the United States in connection
with which it holds such Notes,
does not bear certain relationships to the Company and fulfills
certain certification requirements.
Under such certification requirements, the holder must certify,
under penalties of perjury, that
it is not a United States person and is the beneficial owner of the
Notes, and must provide its
name and address. For this purpose, "United States person" means
a citizen or resident of the
United States, a corporation, partnership, or other entity created
or organized in or under the
laws of the United States or any State thereof (including the
District of Columbia), an estate the
income of which is includible in gross income for United States
federal income tax purposes,
regardless of its source, or a trust subject to the primary
supervision of a court within the United
States and the control of one or more United States fiduciaries
with respect to substantial
decisions.
A Foreign Holder generally will not be subject to United
States federal income tax with
respect to any gain recognized upon the disposition of Notes unless
(i) such gain is effectively
connected with the conduct by the Foreign Holder of a trade or
business in the United States,
(ii) in the case of an individual holder, such Foreign Holder is
present in the United States for
183 days or more in the taxable year during which the disposition
occurs and certain other
conditions are met or (iii) the Notes are treated as subject to the
Contingent Debt Regulations
and the holder fails to satisfy the certification requirements of
the preceding paragraph.
Backup Withholding
Payments made on the Notes and proceeds from the sale of Notes
will not be subject to
a "backup" withholding tax of 31% unless, in general, the holder
fails to comply with certain
reporting procedures and is not an exempt recipient under
applicable provisions of the Code.
The United States Treasury Department has recently issued
final regulations that impose
certain new requirements for establishing an exemption from backup
withholding.
UNDERWRITING
Subject to the terms and conditions set forth in the Terms
Agreement between the
Company and Warburg Dillon Read LLC and Chase Securities, Inc. (the
"Agents"), the
Company has agreed to sell to the Agents and the Agents have agreed
to purchase the principal
amount of the Notes set forth below at a price equal to 101.895% of
the principal amount
thereof, which includes 2.33% of the principal amount thereof as
consideration for the Call
Option.
Principal Amount
Agent of Notes
Warburg Dillon Read LLC. . . . . . . . . . . . . . . $300,000,000
Chase Securities, Inc. . . . . . . . . . . . . . . . $300,000,000
Total . . . . . . . . . . . . . . . . . . . . . $600,000,000
The Agents propose initially to offer the Notes to the public
at the Price to Public set
forth on the cover page hereof and in part to certain securities
dealers at such price less a
concession of 0.25% of the principal amount of the Notes. The
Agents may allow, and such
dealers may reallow, a concession not in excess of 0.15% of the
principal amount of the Notes
to certain brokers and dealers. After the Notes are released for
sale to the public, the offering
price and other selling terms may from time to time be varied by
the Agents. The Agents and
any dealers that participate with the Agents in the distribution of
Notes may be deemed to be
underwriters, and any discounts or commissions received by them and
any profit on the resale
of the Notes by them may be deemed to be underwriting compensation.
The Company has been advised by the Agents that they intend to
make a market in the
Notes, but they are not obligated to do so and may discontinue
market making at any time
without notice.
The Company will indemnify the Agents against certain
liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to
payments the Agents may be
required to make in respect thereof.
The Agents may engage in over-allotment transactions,
stabilizing transactions, syndicate
covering transactions and penalty bids with respect to the Notes in
accordance with Regulation
M under the Securities Exchange Act of 1934, as amended.
Over-allotment transactions involve
syndicate sales in excess of the offering size creating a syndicate
short position. Stabilizing
transactions permit bids to purchase the Notes so long as the bids
do not exceed a specified
maximum. Syndicate covering transactions involve purchases of the
Notes in the open market
after the distribution has been completed in order to cover
syndicate short positions. Penalty
bids permit the Agents to reclaim a selling concession from a
syndicate member when the Notes
originally sold by such syndicate member are purchased in a
syndicate covering transaction.
Such over-allotment transactions, stabilizing transactions,
syndicate covering transactions and
penalty bids may cause prices of the Notes to be higher than they
would otherwise be in the
absence of such transactions. Neither the Company nor the Agents
make any 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, neither the
Company nor the Agents make any
representation that the Agents will engage in such transactions or
that such transactions, once
commenced, will not be discontinued without notice.
In the ordinary course of business, the Agents and their
affiliates have and may in the
future engage in investment banking and commercial banking
transactions with the Company and
certain of its affiliates.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company
by John W. Blenke, Vice
President-Corporate Law for Household International, Inc., the
parent of the Company. Certain
legal matters will be passed upon for the Agents by their counsel,
McDermott, Will & Emery,
Chicago, Illinois. Mr. Blenke is a full-time employee and an
officer of Household International,
Inc. and owns, and holds options to purchase, shares of Common
Stock of Household
International, Inc.
