AMERICAN FINANCIAL CORP, T-3, 1994-02-22

AMERICAN FINANCIAL CORP
T-3, 1994-02-22
FINANCE SERVICES

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<PAGE>
As filed on February 22, 1994

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-3

FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939

AMERICAN FINANCIAL CORPORATION

One East Fourth Street
Cincinnati, Ohio 45202

SECURITIES TO BE ISSUED UNDER THE
INDENTURE TO BE QUALIFIED

Title of Class Amount

9-1/2% Debentures Due April 20, 2004 $750,000,000

Approximate date of proposed public offering:

As soon as practical after the effective
date of this application.

Name and address of agent for service:

James C. Kennedy, Esq.
Deputy General Counsel
American Financial Corporation
9th Floor, Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2538

THE OBLIGOR HEREBY AMENDS THIS APPLICATION FOR QUALIFICATION ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVENESS
UNTIL (i) THE 20TH DAY AFTER THE FILING OF A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT IT SHALL SUPERSEDE THIS AMENDMENT;
OR (ii) SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION
307(c) OF THE ACT, MAY DETERMINE UPON THE WRITTEN REQUEST OF THE
OBLIGOR.

Page 1 of Pages.
Exhibit Index appears on Page 10.
<PAGE>
<PAGE>

GENERAL

(1) General Information. Furnish the following information
as to the applicant:

(a) Form of organization. American Financial Corpora-
tion ("AFC") is a corporation.

(b) State or other sovereign power under the laws of
which organized. AFC is organized under the laws of Ohio.

(2) Securities Act exemption applicable. State briefly the
facts relied upon by the applicant as a basis for the claim that
registration of indenture securities under the Securities Act of
1933 is not required.

Registration of the 9-1/2% Debentures Due April 20, 2004
(the "Debentures") under the Securities Act of 1933 is not
required by reason of the exemption provided by Section 3(a)(9)
thereof. The facts relied upon by it as a basis for such claim
follow.

The Debentures will be issued only to holders of outstanding
debt securities of AFC, who exchange them for the Debentures
pursuant to an exchange offer (the "Exchange Offer") which AFC is
making to such holders. The debt securities of AFC which are
exchangeable for Debentures are (i) 9-1/2% Subordinated Deben-
tures due April 22, 1999, (ii) 10% Debentures due October 20,
1999, (iii) 10% Debentures due October 20, 1999, Series A, (iv)
12% Debentures due September 3, 1999, (v) 12% Debentures due
September 3, 1999, Series A, (vi) 12% Debentures due September 3,
1999, Series B, (vii) 12-1/4% Debentures due September 15, 2003,
(viii) 13-1/2% Debentures due September 14, 2004, and (ix) 13-
1/2% Debentures due September 14, 2004, Series A (collectively,
the "Outstanding Debentures"). The terms and conditions of the
Exchange Offer are set forth in the Offering Circular and the
Letter of Transmittal which are being mailed to holders of the
Outstanding Debentures. Copies of such documents are filed as
exhibits to this application.

A maximum of $550,000,000 aggregate principal amount of
Debentures is to be offered pursuant to the Exchange Offer. The
Exchange Offer is not conditioned upon any minimum principal
amount of Outstanding Debentures being exchanged.

No sales of securities of the same class as the Debentures
have been or are to be made by AFC or by or through an underwrit-
er at or about the same time as the transaction for which the
exemption is claimed.

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No consideration has been or is to be given, directly or
indirectly, to any person in connection with the Exchange Offer
except for (i) the cash consideration to be paid to holders of
the Outstanding Debentures pursuant to the Exchange Offer, (ii)
the customary payments to be made in respect of the preparation,
printing and mailing of the offering materials and related
documents; (iii) the customary mailing and handling expenses
incurred by brokerage houses and other custodians, nominees and
fiduciaries, which hold Outstanding Debentures registered in
their names, in forwarding copies of the offering materials to
beneficial owners and in handling or forwarding tenders for their
clients; (iv) the fees and reasonable out-of-pocket expenses of
approximately $75,000, which has been retained to distribute
offering materials to brokerage houses and other custodians,
nominees and fiduciaries, which hold Outstanding Debentures on
behalf of other persons or entities; (v) the fees and reasonable
out-of-pocket expenses of Securities Transfer Company, which has
been retained as Exchange Agent in connection with the Exchange
Offer; and (vi) the fees and reasonable out-of-pocket expenses
and counsel fees of Star Bank, National Association, the intended
Indenture Trustee under the Indenture to be qualified.

In certain states, the Offering Circular may be transmitted
by a member firm of a registered national securities exchange or
of the National Association of Securities Dealers, Inc. which
will be reimbursed for its expenses in such transmission.

No holder of any Outstanding Debentures has made, or will be
requested to make any cash payment to AFC in connection with the
Exchange Offer.
AFFILIATIONS

(3) Affiliates. Furnish a list or diagram of all affili-
ates of the applicant and indicate the respective percentages of
voting securities or other bases of control.

As a result of stock ownership by AFC and its subsidiaries
at December 31, 1993, the following companies may be deemed to be
affiliates of AFC:

Percentage
of Common
State of Equity
Name of Company Incorporation Ownership
American Annuity Group, Inc. Delaware 80%

Great American Life Insurance Ohio 100(A)
Company

American Financial Enterprises, Inc. Connecticut 83%
Great American Holding Corporation Ohio 100

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<PAGE>

Percentage
of Common
State of Equity
Name of Company Incorporation Ownership
Great American Insurance Company Ohio 100

American Empire Surplus Lines Delaware 100
Insurance Company

American National Fire Insurance New York 100
Company
Great American Management Ohio 100
Services, Inc.

Mid-Continent Casualty Company Oklahoma 100

Stonewall Insurance Company Alabama 100
Transport Insurance Company Ohio 100

The Penn Central Corporation Pennsylvania 41

General Cable Corporation Delaware 45
Chiquita Brands International, Inc. New Jersey 46

Great American Communications Florida 19(B)
Company
(A) Represents ownership by American Annuity Group, Inc.
(B) Represents 21% of voting power.

The names of certain subsidiaries of AFC are omitted as such
subsidiaries in the aggregate would not constitute a significant
subsidiary.

MANAGEMENT AND CONTROL

(4) Directors and Executive Officers. List the names and
complete mailing addresses of all directors and executive offi-
cers of the applicant and all persons chosen to become directors
or executive officers. Indicate all offices which the applicant
held or to be held by each person named.

Name Address Office(s)

Carl H. Lindner One East Fourth Street Chairman of the
Cincinnati, Ohio 45202 Board and Chief
Executive Officer

Richard E. Lindner One East Fourth Street Director
Cincinnati, Ohio 45202

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<PAGE>

Name Address Office(s)
Robert D. Lindner One East Fourth Street Vice Chairman of the
Cincinnati, Ohio 45202 Board

Ronald F. Walker One East Fourth Street Director, President
Cincinnati, Ohio 45202 and Chief Operating
Officer

Carl H. Lindner One East Fourth Street President of Great
III Cincinnati, Ohio 45202 American Insurance
Company and Chief
Operating Officer of
The Penn Central
Corporation
S. Craig Lindner One East Fourth Street President of
Cincinnati, Ohio 45202 American Annuity
Group, Inc. and
Senior Executive
Vice President of
American Money
Management
Corporation

James E. Evans One East Fourth Street Vice President and
Cincinnati, Ohio 45202 General Counsel

Sandra W. Heimann One East Fourth Street Vice President
Cincinnati, Ohio 45202
Robert C. Lintz One East Fourth Street Vice President
Cincinnati, Ohio 45202

Thomas E. Mischell One East Fourth Street Vice President
Cincinnati, Ohio 45202

Fred J. Runk One East Fourth Street Vice President and
Cincinnati, Ohio 45202 Treasurer
James C. Kennedy One East Fourth Street Deputy General Coun-
Cincinnati, Ohio 45202 sel and Secretary

(5) Principal Owners of Voting Securities. Furnish the
following information as to each person owning 10 Percent or more
of the voting securities of the applicant.

Percentage
Title of Amount of Voting
Name and Complete Class Owned at Securities
Mailing Address Owned 12/31/93 Owned

Carl H. Lindner (A) Common 7,749,210 40.9%
One East Fourth Street Stock
Cincinnati, Ohio 45202

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<PAGE>

Percentage
Title of Amount of Voting
Name and Complete Class Owned at Securities
Mailing Address Owned 12/31/93 Owned
Carl H. Lindner III (B) Common 2,836,625 15.0%
One East Fourth Street Stock
Cincinnati, Ohio 45202

S. Craig Lindner (C) Common 2,701,460 14.2%
One East Fourth Street Stock
Cincinnati, Ohio 45202

Keith E. Lindner (D) Common 4,065,958 21.4%
One East Fourth Street Stock
Cincinnati, Ohio 45202
Lindvest, an Ohio Common 1,533,767 8.1%
partnership (E) Stock
3955 Montgomery Road
Cincinnati, Ohio 45212

(A) Includes 678,870 shares held by his wife.
(B) Includes 12,500 shares held by his wife.
(C) Includes 42,179 shares held by his wife individually and as
custodian of their minor children.
(D) Includes 920,742 shares he holds as trustee for the benefit
of certain members of his family. Also included are 12,500
shares which may be acquired through the exercise of stock
options which he holds and 25,000 shares which may be ac-
quired through the exercise of stock options he holds as
trustee.
(E) The general partners of Lindvest are Robert D. Lindner, Jr.,
Jeffrey S. Lindner, A. Bradford Lindner and David C. Lindn-
er, all of whom are sons of Robert D. Lindner.

The above table does not reflect that Robert D. Lindner also
owns an option to purchase 462,500 shares of AFC Common Stock
from AFC which represents approximately 2.4% of AFC's Common
Stock.

(6) Underwriters. Give the name and complete mailing
address of (a) each person who, within three years prior to the
date of filing the application, acted as an underwriter of any
securities of the obligor which were outstanding on the date of
filing the application, and (b) each proposed principal under-
writer of the securities proposed to be offered. As to each
person specified in (a), give the title of each class of securi-
ties underwritten.

None.

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<PAGE>

CAPITAL SECURITIES

(7) Capitalization.

(a) Furnish the following information as to each
authorized class of securities of the applicant.

As of February 18, 1994

Amount
Title of Class Amount Authorized Outstanding
Common Stock, no par 32,300,000 shares 18,971,217
value

Series E Preferred 2,725,000 shares 504,711
Stock,
$10.50 par value

Series F Preferred 15,000,000 shares 13,753,254
Stock,
$1.00 par value
Series G Preferred 2,000,000 shares 364,158
Stock,
$1.00 par value

Series I Preferred 700,000 shares 150,212
Stock,
$.01 par value

12% Debentures Unlimited $201,873,000
(including Series A, B
and BV) due September
3, 1999
10% Debentures Unlimited $150,013,000
(including Series A)
due October 20, 1999

12-1/4% Debentures due $500,000,000 $128,294,000
September 15, 2003

13-1/2% Debentures Unlimited $73,546,000
(including Series A)
due September 14, 2004
9-1/2% Subordinated $8,115,000 $7,708,000
Debentures due April
1999

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<PAGE>

(b) Give a brief outline of the voting rights of each
class of voting securities referred to in paragraph (a) above.

Each share of AFC's Common Stock is entitled to one
vote on the election of Directors and on all matters submitted to
the shareholders for their vote, consent, waiver, release or
other action. Shares of Common Stock have cumulative voting
rights with respect to the election of directors.

Subject to certain limitations, the Board of Directors
of AFC is authorized to issue the Preferred Stock in one or more
series, to fix the number of shares in each series, and to
determine the terms and features of the shares of each series,
including the voting rights, if any.

INDENTURE SECURITIES

(8) Analysis of Indenture Provisions. Insert at this point
the analysis of indenture provisions required under Section
305(a)(2) of the Act.

The Debentures are to be issued under an indenture to
be dated as of February ___, 1994 (the "Indenture") between AFC
and Star Bank, National Association (the "Trustee"). A copy of
the Indenture substantially in the form in which it is expected
to be executed is filed as an exhibit to this application. The
following is a brief analysis of certain provisions of the
Indenture required under Section 305(a)(2) of the Trust Indenture
Act of 1939 and is subject to the detailed provisions of the
Indenture, to which reference is hereby made for a complete
statement of such provisions. Wherever particular provisions of
the Indenture or terms defined therein are referred to herein,
such provisions or definitions are incorporated by reference as a
part of the statements made, and the statements are qualified in
their entirety by such reference.

(A) Events of Default; Withholding of Notice Thereof
to Holders of the Debentures.

The following events are defined in the Indenture as
"Events of Default": 1.) failure to pay principal on the Deben-
tures when due for 20 days; 2.) failure to pay interest on the
Debentures when due for 30 days; 3.) failure to perform any other
covenants in the Indenture for 90 days after notice by the
Trustee or at least 25% in the principal amount of the outstand-
ing Debentures; 4.) certain events of bankruptcy, insolvency or
reorganization of AFC; 5.) certain events of default in any bond,
mortgage, indenture or other instrument under which AFC has
issued or may in the future issue any debt in excess of $10,000,-
000 and such default has not been cured within 30 days after
notice to AFC; and 6.) AFC fails to pay any debt in excess of
$10,000,000 within 20 days after the maturity of such debt.

-8-
<PAGE>

If any Event of Default occurs and is continuing, the
Trustee or the holders of at least 25% in outstanding principal
amount of the Debentures may declare the principal of and accrued
interest on all Debentures due and payable. The Indenture
provides that such declaration and its consequences may, in
certain events, be annulled by the holders of a majority in
principal amount of the outstanding Debentures.

The Indenture provides that the Trustee shall, within
90 days after a default occurs and is continuing and is known to
the Trustee, give to the holders notice of all such uncured
defaults (the term default includes the events specified above
without grace periods); provided that, except in the case of
default in the payment of principal of or interest on the Deben-
tures, the Trustee shall be protected in withholding such notice
if it in good faith determines that the withholding of such
notice is in the interests of the holders of the Debentures.

(B) Authentication and Delivery of New Debentures;
Application of Proceeds.

The Indenture provides that the Trustee or Authenticat-
ing Agent shall authenticate and deliver, upon the written order
of AFC, Debentures in the form specified in the Indenture up to
the aggregate principal amount of $750,000,000. The Indenture
also provides for authentication and delivery of the Debentures
in connection with their transfer, exchange or partial redemp-
tion, and in connection with temporary, mutilated, destroyed,
lost or stolen Debentures.

The issuance of Debentures pursuant to the Exchange
Offer shall result in no proceeds to AFC since such Debentures
shall be issued solely in exchange for Outstanding Debentures.

Not Applicable.

(D) Satisfaction and Discharge of Indenture.

The Indenture provides that it shall terminate (a) upon
cancellation of the Debentures outstanding under the Indenture,
or (b) if AFC deposits with the Trustee money or U.S. Government
Obligations sufficient to pay principal and interest on the
Debentures to maturity or earlier redemption. The Indenture also
provides that upon such deposit the Trustee shall execute a
proper instrument acknowledging the satisfaction and discharge of
the Indenture.

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<PAGE>

(E) Evidence as to Compliance with Conditions and
Covenants.

Under the Indenture, AFC is required to deliver to the
Trustee, within 120 days after the close of each fiscal year of
AFC, a certificate of specified officers of AFC to the effect
that in the course of the performance of their duties they would
normally obtain knowledge of any default by AFC in the perfor-
mance or fulfillment of any covenant, agreement or condition
contained in the Indenture and that they have no knowledge of any
such default (or specifying each such default of which they have
knowledge), and what action the Corporation is proposing to take
with respect thereto.

The Indenture also requires that any application,
demand or request by AFC for action by the Trustee must be
accompanied by an officers' certificate stating that all condi-
tions precedent, if any, provided for in the Indenture relating
to the proposed action have been complied with, together with an
opinion of counsel to the same effect.

(9) Other Obligors. Give the name and complete mailing
address of any person, other than the applicant, who is an
obligor upon the indenture securities.

None.

Contents of Application for Qualification. This application
for qualification comprises -

(a) Pages numbered 1 - 11, consecutively.

(b) The statement of eligibility and qualification of
each trustee under the indenture to be qualified.

(c) The following exhibits in addition to those filed
as part of the statement of eligibility and qualification of each
trustee:

Exhibit Description

T3A Articles of Incorporation of AFC, filed as Exhibit 3 to
AFC's Form 10-K for the year ended December 31, 1988
T3B Code of Regulations of AFC, filed as Exhibit 3 to AFC's
Form 10-K for the year ended December 31, 1988
T3C Form of Indenture to be qualified, dated as of
February , 1994
T3D Not applicable.
T3E(1) Form of Offering Circular, dated February 22, 1994 for
the Exchange Offer.
T3E(2) Form of Letter of Transmittal for the Exchange Offer.
T3F Cross reference sheet (included in Exhibit T3C).

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SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of
1939, the applicant, American Financial Corporation, a corpora-
tion organized and existing under the laws of the State of Ohio,
has duly caused this application to be signed on its behalf by
the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Cincinnati, and
State of Ohio, on the 22nd day of February, 1994.

AMERICAN FINANCIAL CORPORATION

By:

James E. Evans
Vice President and General
Counsel

[SEAL]

Attest:

By:
James C. Kennedy
Deputy General Counsel and
Secretary

(NG2-403.T-3)

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<PAGE>

Securities Act of 1933 File No.___________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1
__________________________________________________

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
PURSUANT TO SECTION 305(b) (2) / X /
__________________________________________________

STAR BANK, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A National Banking Association 31-0841368
(IRS Employer Identification
No.)

425 Walnut Street, Cincinnati, Ohio45202
(Address of Principal Executive Offices)(Zip Code)

_________________________________________________
Nancy V. Kelly
Vice President and Trust Officer
Star Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
(513) 632-4390
(Name, address, and telephone number of agent for services)

AMERICAN FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)

Ohio 31-0841368
(State of Incorporation)(IRS Employer Identification
No.)

One East Fourth Street, Cincinnati, OH45202
(Address of Principal Executive Offices)(Zip Code)

% Debentures Due April 20, 2006

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<PAGE>

(Title of the Indenture securities)

1. General Information. Furnish the following information as
Trustee --

(a) Name and address of each examining or supervising
authority to which it is subject.

Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of Cleveland, Ohio
Federal Deposit Insurance Corporation, Washington, D.C.

(b) Whether it is authorized to exercise corporate trust
powers.

The Trustee is authorized to exercise corporate trust
powers.

2. Affiliations with obligor. If the obligor is an affiliate
of the trustee, describe each such affiliation. The obligor is
not an affiliate of the Trustee (including its parent and any
affiliates).

3. Voting Securities of the trustee. Furnish the following
information as to each class of voting securities of the trustee
(and its parent). As of _____________ (insert date within 31
days)

Col A. Col B.
(Title of Class) (Amount Outstanding)

4. Trusteeships under other Indentures. If the trustee is a
trustee under another Indenture under which any other securities,
or certificates of interest or participation in any other securi-
ties, of the obligor are outstanding, furnish the following
information:

(a) Title of the securities outstanding under each such
other indenture.

(b) A brief statement of the facts relied upon as a basis
for the claim that no conflicting interest within the meaning of
Section 310(b) (1) of the Act arises as a result of the trustee-
ship under any such other indenture, including a statement as to
how the indenture securities will rank as compared with the
securities issued under such other indenture.

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<PAGE>

5. Interlocking directorates and similar relationships with
the obligor or underwriters. If the trustee (including its
parent and any other affiliates) or any of the directors or
executive officers of the trustee is a director, officer, part-
ner, employee, appointee, or representative of the obligor or of
any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.

6. Voting securities of the trustee (including its parent and
any affiliate) owned by the obligor or its officials. Furnish
the following information as to the voting securities of the
trustee (including its parent and any affiliates) owned benefi-
cially by the obligor and each director, partner and executive
officer of the obligor: As of _______________________ (insert
date within 31 days)

Col. A. Col. B. Col. C Col. D
Percentage of
Voting
Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Col. C

7. Voting Securities of the trustee (including its parent and
any affiliates) owned by underwriters of their officials.
Furnish the following information as to the voting securities of
the trustee (including its parent and any affiliates) owned
beneficially by each underwriter for the obligor and each direc-
tor, partner, and executive officer of each such underwriter:

As of ___________________(insert date within 31 days)

Col. A Col. B Col. C Col. D
Percentage of
Voting
Securities
Represented by
Amount Owned Amount Given
Name of Owner Title of Class Beneficially in Col. C

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8. Securities of the obligor owned or held by the trustee
(including its parent and any affiliates). Furnish the follow-
ing information as to securities of the obligor owned beneficial-
ly or held as collateral security for obligations default by the
trustee (including its parent and any affiliates):
As of ___________________(insert date within 31 days)

Col. A Col. B Col. C Col. D
Amount Owned
Beneficially
Whether the or Held Percentage
Securities Are as Collateral of Class
Voting or Security for Represented
Nonvoting obligations in by Amount
Title of Class Securities Default given in
Col.C

9. Securities of underwriters owned or held by the trustee
(including its parent and any affiliates). If the trustee
(including its parent and any affiliates) owns beneficially or
holds as collateral security for obligations in default any
securities of an underwriter for the obligor, furnish the follow-
ing information as to each class of securities of such underwrit-
er any of which are so owned or held by the trustee:

Col. A Col. B Col. C Col. D
Amount Owned
Beneficially
Whether the or Held Percentage
Title Securities Are as Collateral of Class
of Issuer Voting or Security for Represented
and Title Nonvoting obligations in by Amount
Class Securities Default given in
Col.C

10. Ownership or holdings by the trustee (including its parent
and any affiliates) of voting securities of certain affiliates or

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<PAGE>

security holders of the obligor. If the trustee (including its
parent and any affiliates) owns beneficially or holds as collat-
eral security for obligations in default voting securities of a
person who, to the knowledge of the trustee (1) owns 10% or more
of the voting securities of the obligor or (2) is an affiliate,
other than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person:

As of _______________________(insert date within 31 days)

11. Ownership or holdings by the trustee (including its parent
and any affiliates) of any securities of a person owning 50
percent or more of the voting securities of the obligor. If the
trustee (including its parent and any affiliates) owns benefi-
cially or holds as collateral security for obligations in default
any securities of a person who, to the knowledge of the trustee,
owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities
of such person any of which are so owned or held by the trustee
(including its parent and affiliates):

As of ______________________(insert date within 31 days)

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<PAGE>

12. Indebtedness of the Obligor to the Trustee. Except as noted
in the instructions, if the obligor is indebted to the trustee,
furnish the following information:

As of ____________________(insert date with 31 days)

Col. A Col. B Col. C
Amount
Nature of Indebtedness Outstanding Due Date

13. Defaults by the Obligor.
a) State whether there is or has been a default with
respect to the securities under this indenture. Explain the
nature of any such default.

-NONE-

b) If the Trustee is a trustee under another indenture
under which any other securities, or certificates of interest or
participation in any other securities, of the obligor are out-
standing, or is trustee for more than one outstanding series or
securities under the indenture, state whether there has been a
default under any such indenture or series, identify the inden-
ture or series affected, and explain the nature of any such
default.

As of January 17, 1994 (insert date
within 31 days)

-NONE-

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<PAGE>

14. Affiliations with the Underwriters. If any underwriter is
an affiliate of the trustee (including its parent and any affili-
ates), described each such affiliation.

15. Foreign Trustee. Identify the order or rule pursuant to
which the foreign trustee is authorized to act as sole trustee
under indentures qualified or to be qualified under the Act.

16. List of Exhibits. List below all exhibits filed as part of
this statement of eligibility.

1. (a) A copy of the Articles of Association of The First
National Bank of Cincinnati (now Star Bank, Na-
tional Association) as now in effect.

(b) A copy of the Amended Articles of Association
dated June 14, 1991, changing the name of the
association to Star Bank, National Association.

2. (a) A copy of the certificate of authority of The
First National Bank of Cincinnati (now Star Bank,
National Association) to commence business dated
September 1, 1922.

(b) A copy of a Certificate of the Comptroller of the
Currency dated December 21, 1973, authorizing F N
National Bank to commence the business of banking.

(c) A copy of a Certificate of the Comptroller of the
Currency dated December 28, 1973, approving the
merger of The First National Bank of Cincinnati
(now Star Bank, National Association) into F N
National Bank under the title "The First National
Bank of Cincinnati" effective January 2, 1974.

(d) A copy of a letter dated June 8, 1988, from the
Comptroller of the Currency indicating the change

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<PAGE>

in the name of the association to Star Bank, Na-
tional Association, Cincinnati, effective July 1,
1988.

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<PAGE>

(e) A copy of a letter dated July 15, 1991, from the
Comptroller of the Currency indicating the change
in the name of the association to Star Bank, Na-
tional Association, effective June 14, 1991.

3. A copy of the authorization of The First National Bank
of Cincinnati (now Star Bank, National Association) to exercise
corporate trust powers.

4. A copy of existing By-Laws to Star Bank, National
Association, Cincinnati (now Star Bank, National Association)

5. The consent of the Trustee required by section 321 (b)
of the Trust Indenture Act of 1939.

6. A copy of the latest report of condition of Star Bank,
National Association, published pursuant to law or the require-
ments of its supervising or examining authority.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act
of 1939, the Trustee, Star Bank, National Association, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Cincinnati and
State of Ohio on the 16th day of February, 1994.

STAR BANK, NATIONAL ASSOCIATION

By: /s/

Stephen J. Blackstone
Trust Officer

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<PAGE>

EXHIBIT 1 (a)

STAR BANK, NATIONAL ASSOCIATION, CINCINNATI
CHARTER NO. 24
ARTICLES OF ASSOCIATION

FIRST: The title of this Association shall be "Star Bank,
National Association, Cincinnati."*

SECOND: The main office of the Association shall be in the City
of Cincinnati, County of Hamilton, State of Ohio. The general
business of the Association shall be conducted at its main office
and its branches.

THIRD: The Board of Directors of this Association shall
consist of not less than five (5) nor more than twenty-five (25)
shareholders, the exact number of Directors within such minimum
and maximum limits to be fixed and determined from time to time
by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any annual or special meeting
thereof. Unless otherwise provided by the laws of the United
States, any vacancy in the Board of Directors for any reason,
including an increase in the number thereof, may be filled by
action of the Board of Directors.

FOURTH: The annual meeting of the shareholders for the election
of Directors and the transaction of whatever other business may
be brought before said meeting shall be held at the main office
or such other place as the Board of Directors may designate, on
the day of each year specified therefor by the Bylaws, but if no
election is held on that day, it may be held on any subsequent
day according to the provisions of law; and all elections shall
be held according to such lawful regulations as may be prescribed
by the Board of Directors.

FIFTH: The authorized amount of capital stock of this
Association shall be 3,640,000 shares of common stock of the par
value of five dollars ($5.00) each, but said capital stock may be
increased or decreased from time to time, in accordance with the
provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the
Association shall have any pre-emptive or preferential right of
subscription to any shares of any class of stock of the
Association, whether now or hereafter authorized, or to any
obligations convertible into stock of the Association issued or
sold, nor any right of subscription to any thereof other than
such, if any, as the Board of Directors, in its discretion, may
from time to time determine and at such price as the Board of
Directors may from time to time fix.

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<PAGE>

The Association, at any time and from time to time, may
authorized and issue debt obligations, whether or not
subordinated, without the approval of the shareholders.

*Amended June 14, 1991, see attached.
SIXTH: The Board of Directors shall appoint one of its members
President of this Association, who shall be Chairman of the
Board, unless the Board appoints another Director to be the
Chairman. The Board of Directors shall have the power to appoint
one or more Vice Presidents; and to appoint a Cashier and such
other officers and employees as may be required to transact the
business of this Association. The Board of Directors shall have
the power to define the duties of the officers and employees of
the Association; to fix the salaries to be paid to them; to
dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the
capital of the Association shall be made; to manage and
administer the business and affairs of the Association; to make
all Bylaws that it may be lawful for them to make and generally
to do and perform all acts that it may be legal for a Board of
Directors to do and perform.

The Board of Directors, without need for approval of
shareholders, shall have the power to change the location of the
main office of this Association, subject to such limitations as
from time to time may be provided by law; and shall have the
power to establish or change the location of any branch or
branches of the Association to any other location, without the
approval of the shareholders, but subject to the approval of the
Comptroller of the Currency.

SEVENTH: The corporate existence of this Association shall
continue until terminated in accordance with the laws of the
United States.

EIGHTH: The Board of Directors of this Association, the
Chairman of the Board, the President, or any three or more
shareholders owning, in the aggregate, not less twenty-five
percent of the stock of this Association, may call a special
meeting of shareholders at any time. Unless otherwise provided
by the laws of the United States, a notice of the time, place,
and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid,
mailed at least ten days prior to the date of such meeting to
each shareholder of record at his address as shown upon the books
of this Association.

NINTH: Any person, his heirs, executors, or administrators,
may be indemnified or reimbursed by the Association for
reasonable expenses actually incurred in connection with any
action, suit, or proceeding, civil or criminal, to which he or
they shall be made a party by reason of his being or having been

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<PAGE>

a director, officer, or employee of the Association or of any
firm, corporation, or organization which he served in any such
capacity at the request of the Association. Provided, however,
that no person shall be so indemnified or reimbursed in relation
to any matter in such action, suit, or proceeding as to which he
shall finally be adjudged to have been guilty of or liable for
gross negligence, willful misconduct or criminal acts in the
performance of his duties to the Association; and, provided
further, that no person shall be so indemnified or reimbursed in
relation to any matter in such action, suit, or proceeding which
has been made the subject of a compromise settlement except with
the approval of a court of competent jurisdiction, or the holders
of record of a majority of the outstanding shares of the
Association, or the Board of Directors, acting by vote of
Directors not parties to the same or substantially the same
action, suit, or proceeding, constituting a majority of the whole
number of Directors. The foregoing right of indemnification
shall not be exclusive of other rights to which such person, his
heirs, executors, or administrators, may be entitled as a matter
of law. The Association may, upon the affirmative vote of a
majority of its Board of Directors, purchase insurance for the
purpose of indemnifying its directors, officers and other
employees to the extent that such indemnification is allowed in
the preceding paragraph. Such insurance may, but need not, be
for the benefit of all directors, officers, or employees.

TENTH: These Articles of Association may be amended at any
regular or special meeting of the shareholders by the affirmative
vote of the holders of a majority of the stock of this
Association, unless the vote of the holders of a greater amount
of stock is required by law and in that case by the vote of the
holders of such greater amount.

August 18, 1988

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<PAGE>

EXHIBIT 1(B)

STAR BANC
CORPORATION

June 14, 1991

Deputy Comptroller
Central District
Office of the Comptroller of the Currency
One Financial Place
440 S. LaSalle, Suite 2700
Chicago, Illinois 60605

Dear Deputy Comptroller:

Re: Letter of Notification

Star Bank, National Association, Cincinnati, Charter #24
intends to change its corporate title to Star Bank, National
Association. The effective date of the change is June 14, 1991.

A certified copy of the amendment to the articles of
association is enclosed. The amendment conforms to the
requirements of 12 USC 21 a.

Sincerely,

/s/

F. Kristen Koepcke

FKK:bjt
Enclosure

-24-
<PAGE>

EXHIBIT 1 (b)

MINUTES OF SPECIAL MEETING OF THE SHAREHOLDER
STAR BANK, NATIONAL ASSOCIATION, CINCINNATI

A Special Meeting of the shareholder of Star Bank, National
Association, Cincinnati (the "Bank") was held on June 14, 1991.

Mr. Oliver W. Waddell called the meeting to order and selected
Mr. F. Kristen Koepke to act as Secretary.

The Secretary reported that all the outstanding shares of the
Bank were represented at this meeting and that the shareholder
had waived notice of this special meeting. Therefore, a quorum
was present.

Mr. Waddell stated that the purpose of the meeting was to
consider a proposed name change for the Bank as recommended by
the Board of Directors. On motion duly made and carried, the
following resolution was adopted:

RESOLVED, That Article First of the Articles of Association
of the Bank be amended in its entirely to read as follows:

FIRST: The title of this Association shall be "Star
Bank, National Association."

There being no further business to come before the meeting, on
motion duly made and carried, the meeting was adjourned.

/s/
F. Kristen Koepke, Secretary

Approved:

/s/
Oliver W. Waddell
Chairman, Star Banc Corporation,
Shareholder

Certified Copy

/s/
Secretary

-25-
<PAGE>

EXHIBIT 2 (a)

COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS:

NO. 24

E Pluribus Unum
TREASURY DEPARTMENT

Office of Comptroller of the Currency

Washington, D.C., September 1, 1992

WHEREAS, the Act of Congress of the United States, entitled,
"An Act to amend section 5136, Revised Statutes of the United
States, relating to corporate powers of associations, so as to
provide succession thereof for a period of ninety-nine years or
until dissolved, and to apply said section as so amended to all
national banking association", approved by the President on July
1, 1922, provided that all national banking associations
organized and operating under any law of the United States on
July 1, 1992 should have succession until ninety-nine years from
that date, unless such association should be sooner dissolved by
the act of its shareholders owning two-thirds of its stock, or
unless its franchise should become forfeited by reason of
violation of law, or unless it should be terminated by an Act of
Congress hereinafter enacted;

NOW THEREFORE, I, D. R. Crissinger Comptroller
of the Currency, do hereby certify that The First
National Bank of Cincinnati and State of Ohio ,
was organized and operating under the laws of the United States
on July 1, 1922, and that its corporate existence was extended
for the period of ninety-nine years from that date in accordance
with and subject to the condition in the Act of Congress
hereinbefore recited.

(SEAL) IN TESTIMONY WHEREOF, witness my
hand and seal of office this first
day of September, 1922

(Signed) D. R. Crissinger

Comptroller of the Currency

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<PAGE>

EXHIBIT 2 (b)

Comptroller of the Currency

TREASURY DEPARTMENT OF THE UNITED STATES

Washington, D.C.

Whereas, satisfactory evidence has been presented to the

Comptroller of the Currency that

"FN NATIONAL BANK".

located in CINCINNATI, State of OHIO, has

complied with all provisions of the Statutes of the United

States required to be complied with before being authorized to

commence the business of banking as National Banking Association;

Now, therefore, I hereby certify that the above-named

association is authorized to commence the business of banking as

a National Banking Association.

In testimony whereof, witness my

signature SEAL and seal of office this

21st day of

December, 1913.

/S/

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<PAGE>

EXHIBIT 2 (c)

Comptroller of the Currency

TREASURY DEPARTMENT OF THE UNITED STATES

Washington, D.C.

WHEREAS, satisfactory evidence has been presented to the

Comptroller of the Currency that all requisite legal and

corporate action has been taken, in accordance with the statutes

of the United States, to merge The First National Bank of

Cincinnati, Cincinnati, Ohio, into FN National Bank, Cincinnati,

Ohio, under the charter of FN National Bank and under the title

"The First National Bank of Cincinnati," with capital stock of

$18,200,000;

NOW, THEREFORE, it is hereby certified that such merger was

approved November 29, 1973, and is effective as of the opening of

business January 2, 1974.

IN TESTIMONY WHEREOF< witness my

signature and seal of office this 28th

day of December, 1973

SEAL /S/
James E. Smith
Comptroller of the Currency

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<PAGE>

EXHIBIT 2(d)

_________________________________________________________________

Comptroller of the Currency
Administrator of National Banks
_________________________________________________________________

Central District
One Financial Plaza, Suite 2700
440 South LaSalle Street
Chicago, Illinois 60605

June 8, 1988

Mr. Raymond D. Beck
Secretary & Counsel
First National Cincinnati Corporation
First National Bank Center
425 Walnut Street
Cincinnati, Ohio 45201-1038

Dear Mr. Beck:

The office of the Comptroller of the Currency acknowledges
receipt of your letters concerning First National Cincinnati
Corporation's banking subsidiarys' title changes and the
appropriate amendments to each bank's articles of association.
The Office has recorded the following banks' title changes
effective July 1, 1988.

Old Title New Title
The First National Bank of Ironton Star Bank, National
Association,
Ironton, Ohio Tri-State
Charter No. 16607

Farmers and Traders National Bank Star Bank, National
Association
Hillsboro, Ohio Hillsboro
Charter No. 17646

The First National Bank Star Bank, National
Association
of Cincinnati Cincinnati
Cincinnati, Ohio
Charter No. 24

The First National Bank & Star Bank, National
Association
Trust Company Troy
Troy, Ohio

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<PAGE>

Charter No. 9336

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<PAGE>

Page 2
Mr. Raymond D. Beck (cont'd)

The Second National Bank Star Bank, National
of Hamilton Association
Hamilton, Ohio Butler County
Charter No. 17200

The Second National Bank Star Bank, National
of Richmond Association
Richmond, Indiana Eastern Indiana
Charter No. 1988

The First National Bank of Aurora Star Bank, National
Aurora, Indiana Association
Charter No. 699 Aurora

The Peoples National Bank Star Bank, National
of Lawrenceburg Association
Lawrenceburg, Indiana Southeastern Indiana
Charter No. 2612

Newport National Bank Star Bank, National
Newport, Kentucky Association
Charter No. 4765 Campbell County

The First National Bank Star Bank, National
Sidney, Ohio Association
Charter No. 5214 Sidney

Very truly yours,

David J. Rogers
National Bank Examiner
Analysis Division

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<PAGE>

EXHIBIT 2(e)

_________________________________________________________________

Comptroller of the Currency
Administrator of National Banks
_________________________________________________________________

Central District
One Financial Place
440 S. LaSalle, Suite 2700
Chicago, Illinois 60605

July 15, 1991

Mr. F. Kristen Koepcke
Vice President, General Counsel and Secretary
Star Banc Corporation
425 Walnut Street
P.O. Box 1038
Cincinnati, Ohio 45201-1038

Dear Mr. Koepcke:

The Office of the Comptroller of the Currency has received your
letter concerning the title change and the appropriate amendment
to the bank's articles of association. The Office has recorded
that as of June 14, 1991, the title of Star Bank, National
Association, Cincinnati, Charter No. 24, was changed to Star
Bank, National Association.

As a result of the Garn-St Germain Depository Institutions Act of
1982, this Office is no longer responsible for the approval of
national bank name changes nor does it maintain official records
on the use of alternate titles. The use of other titles or the
retention of the rights to any previously used title is the
responsibility of the bank's board of directors. Legal counsel
should be consulted to determine whether or not the new title, or
any previously used title, could be challenged by competing
institutions under the provisions of federal or state law.

Very truly yours,

David J. Rogers
National Bank Examiner
Analysis Division

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<PAGE>

EXHIBIT 3

THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS:

FEDERAL RESERVE BOARD
Washington, D.C.

October 9, 1919

Pursuant to authority vested in the Federal Reserve Board by
the Act of Congress approved December 23, 1913, known as the
Federal Reserve Act, as amended by the Act of September 26, 1918,
the

FIRST NATIONAL BANK OF CINCINNATI

has been granted the right to act, when not in contravention of
State or local law, as TRUSTEE, EXECUTOR, ADMINISTRATOR,
REGISTRAR OF STOCKS AND BONDS, GUARDIAN OF ESTATES, ASSIGNEE,
RECEIVER OR IN ANY OTHER FIDUCIARY CAPACITY IN WHICH STATE BANKS,
TRUST COMPANIES OR OTHER CORPORATIONS WHICH COME INTO COMPETITION
WITH NATIONAL BANKS ARE PERMITTED TO ACT UNDER THE LAWS OF THE
STATE OF OHIO. The exercise of such rights shall be subject to
regulations prescribed by the Federal Reserve Board.

Federal Reserve Board,

By W. P. G. Harding
Governor.

ATTEST:
W. T. Chapman
Secretary.
STATE OF OHIO
DEPARTMENT OF BANKS AND BANKING
Certificate of Authority No. 17
NATIONAL BANKS

I, Philip C. Berg, Superintendent of Banks, do hereby
certify that the First National Bank of Cincinnati, Hamilton
County, Ohio has complied with all the requirements provided by
law and is authorized to transact the business of a trust company
and to perform all the functions granted to such companies by the
laws of this state.

Given under my hand and official Seal at
Columbus, Ohio, this twenty-fifth day of
November, A.D. 1919

Philip C. Berg,
Superintendent of Banks.

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<PAGE>

(SEAL)
EXHIBIT 4

BY-LAWS

STAR BANK, N.A., CINCINNATI

ARTICLE I

MEETINGS OF SHAREHOLDERS

SECTION 1. ANNUAL MEETING

The annual meeting of shareholders shall be held in the main
banking house of the Association at 11:00 a.m. on the second
Tuesday in February of each year. Notice of such meeting shall
be mailed to shareholders not less than ten (10) nor more than
sixty (60) days prior to the meeting date.

SECTION 2. SPECIAL MEETINGS

Special meetings of shareholders may be called and held at such
times and upon such notice as is specified in the Articles of
Association.

SECTION 3. QUORUM

A majority of the outstanding capital stock represented in person
or by proxy shall constitute a quorum of any meeting of the
shareholders, unless otherwise provided by law, but less than a
quorum may adjourn any meeting, from time to time, and the
meeting amy be held as adjourned without further notice.

SECTION 4. INSPECTORS

The Board of Directors may, and in the event of its failure so to
do, the Chairman of the Board shall appoint Inspectors of
Election who shall determine the presence of a quorum, the
validity of proxies, and the results of all elections and all
other matters voted upon by shareholders at all annual and
special meetings of shareholders.

SECTION 5. VOTING

In deciding on questions at meetings of shareholders, except in
the election of directors, each shareholder shall be entitled to
one vote for each share of stock held. A majority of votes cast
shall decide each matter submitted to the shareholders, except
where by law a larger vote is required. In all elections of
directors, each shareholder shall have the right to vote the
number of shares owned by him for as many persons as there are
directors to be elected, or to cumulate such shares and give one
candidate as many votes as the number of directors multiplied by

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<PAGE>

the number of his shares equal, or to distribute them on the same
principle among as many candidates as he shall think fit.
ARTICLE II

SECTION 1. TERM OF OFFICE

The directors of this Association shall hold office for one year
and until their successors are duly elected and qualified.

SECTION 2. REGULAR MEETINGS

The organization meeting of the Board of Directors shall be held
as soon as practical following the annual meeting of shareholders
at the main banking house. Other regular meetings of the Board
of Directors shall be held without notice at 11:00 a.m. on the
second Tuesday of each month except February, at the main banking
house, or, provided notice is given by telegram, letter,
telephone or in person to every Director, at such time and place
as may be designated in the notice of the meeting. When any
regular meeting of the Board falls on a holiday, the meeting
shall be held on the next banking business day, unless the Board
shall designate some other day.

SECTION 3. SPECIAL MEETINGS

Special meetings of the Board of Directors may be called by the
Chairman of the Board of the Association, or at the request of
three or more Directors. Notice of the time, place and purposes
of such meetings shall be given by telegram, letter, telephone or
in person to every Director.

SECTION 4. QUORUM

A majority of the entire membership of the Board shall constitute
a quorum at any meeting of the Board.

SECTION 5. NECESSARY VOTE

A majority of those Directors present and voting at any meeting
of the Board of Directors shall decide each matter considered,
except where otherwise required by law or the Articles or By-Laws
of this Association.

SECTION 6. COMPENSATION

Directors, excluding full-time employees of the Bank, shall
receive such reasonable compensation as may be fixed from time to
time by the Board of Directors.

SECTION 7. ELECTION-AGE LIMITATION
No person shall be elected or reelected a Director after reaching
his seventieth (70th) birthday, provided that any person who is a

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<PAGE>

Director on December 10, 1985, may continue to be reelected a
Director until he reaches his seventy-fifth (75th) birthday.

SECTION 8 RETIREMENT-AGE LIMITATION

Every Director of the Bank shall retire no later than the first
month next following his seventieth (70th) birthday, except for
any person who was a Director on December 10, 1985, who shall
retire not later that the first of the next month following his
seventy-fifth (75th) birthday.

SECTION 9 DIRECTORS EMERITUS

The Board shall have the right from time to time to choose as
Directors Emeritus persons who have had prior service as members
of the Board and who may receive such compensation as shall be
fixed from time to time by the Board of Directors.

ARTICLE III

OFFICERS

SECTION 1 WHO SHALL CONSTITUTE

The Officers of the Association shall be a Chairman of the Board,
a President, a Secretary, and other officers such as Chairman of
the Executive Committee, Vice Chairman of the Board, Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents,
Assistant Secretaries, Trust Officers, Trust Investment Officers,
Trust Real Estate Officers, Assistant Trust Officers, a
Controller, Assistant Controller, an Auditor and Assistant
Auditors, as the Board may appoint from time to time. Any person
may hold two offices. The Chairman of the Board, all Vice
Chairmen of the Board and the President shall at all times be
members of the Board of Directors.

SECTION 2 TERM OF OFFICE

All officers shall be elected for and shall hold office for one
year and until their successors are elected and qualified,
subject to the right in the Board of Directors by a majority vote
of the entire membership to discharge any officer at any time.

SECTION 3 CHAIRMAN OF THE BOARD (Amended 12/13/88-see
attachment)

The Chairman of the Board shall be the Chief Executive Officer of
the Association and shall have all duties, responsibilities and
powers of the Chief Executive Officer. He shall, when present,
preside at all meetings of shareholders and directors and shall
be ex officio a member of all committees of the Board. He shall

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<PAGE>

name all members of the committees of the Board, subject to the
confirmation thereof by the Board.

In the event that there is a vacancy in the position of President
or in the event of the absence or incapacity of the President,
the Chairman may appoint, or in the event of his failure to do
so, the Board of Directors or the Executive Committee thereof may
designate any Vice Chairman of the Board, any Executive Vice
President or any Senior Vice President of the Association
temporarily to exercise the powers and perform the duties of the
Chairman as Chief Executive Officer when the Chairman is absent
or incapacitated.

The Board of Directors shall have the power to elect a Chairman
of the Executive Committee. Any such Chairman of the Executive
Committee shall participate in the formation of the policies of
the Association and shall have such other duties as may be
assigned to him from time to time by the President or by the
Board of Directors.

SECTION 4 PRESIDENT (amended 12/13/88-see attachment)

The President shall participate in the formation and supervision
of the policies and operations of the Association and shall
perform such other duties as may be assigned to him from time to
time by the Board of Directors or by the Chairman of the Board.
In the event that there is a vacancy in the position of the
Chairman of the Board, the President shall be the Chief Executive
Officer of the Association and shall have all the powers and
perform all the duties of the Chairman of the Board, including
the same power to name temporarily a Chief Executive Officer to
serve in the absence of the President.

SECTION 5 CHAIRMAN OF THE EXECUTIVE COMMITTEE

SECTION 6 VICE CHAIRMEN OF THE BOARD

The Board of Directors shall have the power to elect one or more
Vice Chairmen of the Board of Directors. Any such Vice Chairmen
of the Board shall participate in the formation of the policies
of the Association and shall have such other duties as may be
assigned to him from time to time by the Chairman of the Board or
by the Board of Directors.

SECTION 7 OTHER OFFICERS

-37-
<PAGE>

The Secretary and all other officers appointed by the Board of
Directors shall have such duties as defined by law and as may
from time to time be assigned to them by the Chief Executive
Officer or the Board of Directors.

-38-
<PAGE>

SECTION 8 RETIREMENT

Every officer of the Association shall retire not later than the
first of the month next following his sixty-fifth (65th)
birthday. The Board of Directors may, in its discretion, set the
retirement date and terms of retirement of an officer at a date
later than provided above.

ARTICLE IV

COMMITTEES

SECTION 1 EXECUTIVE COMMITTEE

There shall be a standing committee of Directors in this
Association to be known as the Executive Committee. This
Committee shall meet at 11:00 a.m. on the first and fourth
Tuesday of each month. It shall have all of the powers of the
Board of Directors between meetings of the Board, except as the
Board only by law is authorized to perform or exercise. All
actions of the Executive Committee shall be reported to the Board
of Directors. In the event that any member of the Executive
Committee is unable to attend a meeting of that committee, the
Chairman of the Board or the President may, at his discretion,
appoint another Director to attend said meeting of the Executive
Committee and for that meeting to serve as a member of the
Executive Committee with full power to act in place of the absent
regular member of the committee.

SECTION 2 COMPENSATION COMMITTEE

There shall be a standing committee of directors of this
Association to be known as the Compensation Committee who shall
review the compensation of all Executive Officers and those
officers who participate in the Profit Sharing Pool as well as
fees for directors of the Association. They will recommend
specific compensation arrangements to the Board of Directors for
their confirmation.

SECTION 3 COMMITTEE ON AUDIT

There shall be a standing committee of Directors of this
Association to be known as the Committee on Audit, none of whose
members shall be active officers of the Association. This
Committee shall make or cause to be made a suitable examination
of the affairs of the Association and the Trust Department at
least once during each period of twelve months. The results of
such examination shall be reported in writing to the Board at the
next regular meeting thereafter stating whether the Association
and/or Trust Department is in a sound solvent condition, whether
adequate internal audit controls and procedures are being
maintained and make such recommendations as it deems advisable.

-39-
<PAGE>

-40-
<PAGE>

SECTION 4 TRUST COMMITTEE

There shall be a standing committee of Directors of this
Association to be known as the Trust Committee. The Trust
Committee shall determine policies of the Department and review
actions of the Trust Investment Committee. All actions of the
Trust Committee shall be reported to the Board of Directors.

SECTION 5 TRUST INVESTMENT COMMITTEE
There shall be a standing committee of this Association to be
known as the Trust Investment Committee composed of officers of
the Association. The Trust Investment Committee or such officers
as may be duly designated by the Trust Investment Committee,
shall pass upon the acceptance of all trusts, the closing out or
relinquishment of all trusts and the making, retention, or
disposition of all investments of trust funds in conformity with
policies established by the Trust Committee. Actions of the
Trust Investment Committee shall be reported to the Trust
Committee.

SECTION 6 PENSION COMMITTEE

There shall be a standing committee of directors or officers of
this Association to be known as the Pension Committee, who shall
have the powers and duties as set forth in the Association's
Employees' Pension Plan. A report of the condition of the
pension fund shall be submitted annually to the Board of
Directors.

SECTION 7 OTHER COMMITTEES

The Chairman may appoint, from time to time, other committees for
such purposes and with such powers as he or the Board may direct.

ARTICLE V

SEAL

SECTION 1 IMPRESSION

The following is an impression of the seal of this Association.

-41-
<PAGE>

August 25, 1988
<PAGE>

-42-
<PAGE>

RESOLVED, That Section 3 of Article III of the By-Laws of the
Bank shall be amended to read:

SECTION 3 CHAIRMAN OF THE BOARD

The Chairman of the Board shall have general executive powers and
duties and shall perform such other duties as amy be assigned
from time to time by the Board of Directors. In addition, unless
the Board of Directors shall have designated the President to be
the Chief Executive Officer, the Chairman of the Board shall be
the Chief Executive Officer and shall have all the powers and
duties of the Chief Executive Officer. He shall, when present,
preside at all meetings of shareholders and directors and shall
be ex officio a member of all committees of the Board. He shall
name all members of the committees of the Board, subject to the
confirmation thereof by the Board.

If he is Chief Executive Officer, in the event that there is a
vacancy in the position of President or in the event of the
absence or incapacity of the President, the Chairman may appoint,
or in the event of his failure to do so, the Board of Directors
or the Executive Committee thereof may designate, any Vice
Chairman of the Board, any Executive Vice President or any Senior
Vice President of the Association temporarily to exercise the
powers and perform the duties of the Chairman as Chief Executive
Officer when the Chairman is absent or incapacitated.

If the President has been designated Chief Executive Officer by
the Board of Directors, in the event that there is a vacancy in
the position of the President or in the event of the absence or
incapacity of the President, the Chairman shall be the Chief
Executive Officer of the Association and shall have all the
powers and perform all the duties of the President, including the
powers to name temporarily a Chief Executive Officer to serve in
the absence of the Chairman.

FURTHER RESOLVED, That Section 4 of Article III of the By-Laws of
the bank shall be amended to read:

SECTION 4 PRESIDENT

The President shall have general executive powers and duties and
shall perform such other duties as may be assigned from time to
time by the Board of Directors. In addition, if designated by
the Board of Directors, the President shall be the Chief
Executive Officer and shall have all the powers and duties of the
Chief Executive Officer, including the same power to name
temporarily a Chief Executive Officer to serve in the absence of
the President if there is a vacancy in the position of the
Chairman or in the event of the absence or incapacity of the
Chairman.

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<PAGE>

If the Chairman has been designated Chief Executive Officer by
the Board of Directors, in the event that there is a vacancy in
the position of the Chairman of the Board or in the event of the
absence or incapacity of the Chairman of the Board, the President
shall be the Chief Executive Officer of the Association and shall
have all the powers and perform all the duties of the Chairman of
the Board, including the same power to name temporarily a Chief
Executive Officer to serve in the absence of the President.

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<PAGE>

EXHIBIT 5

THE CONSENT OF THE TRUSTEE
REQUIRED BY 321 (b) OF THE ACT

Star Bank, National Association, the Trustee executing the

statement of eligibility and qualification to which this Exhibit

is attached does hereby consent that reports of examinations of

the undersigned by Federal, State, Territorial or District

authorities may be furnished by such authorities to the

Securities and Exchange Commission upon request therefor in

accordance with the provisions of 321 (b) of the Trust Indenture

Act of 1939.

STAR BANK, NATIONAL ASSOCIATION

February 16, 1994 BY: /s/
Date Stephen J. Blackstone
Trust Officer

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<PAGE>

Exhibit 6
STAR BANK, N.A.
STATEMENTS OF CONDITION
(dollars in thousands)

DECEMBER
1993
________
ASSETS:
Cash and Due from Banks . . . . . . $ 36l,285
Interest Bearing Deposits . . . . . -
Federal Funds Sold and Securities Purchased
Under Agreements to Resell . . . . 172,675
Investment Securities . . . . . . . 1,407,615
Loans:
Commercial Loans . . . . . . . 1,650,258
Real Estate Loans . . . . . . 1,689,865
Retail Loans . . . . . . . . . 1,256,833
Total Loans . . . . . . . . . 4,596,956
Less: Unearned Interest . . . 40,941
4,556,015
Allowance for Loan Losses 69,714
Net Loans . . . . . . . . . . 4,486,301
Premises and Equipment . . . . 69,072
Acceptances - Customers' Liability 3,026
Other Assets . . . . . . . . . 129,944

Total Assets . . . . . . . . . 6,629,918

LIABILITIES:
Deposits:
Non-Interest Bearing Deposits . . . 1,099,722
Interest Bearing Deposits:
Savings and NOW . . . . . . . . . 1,443,775
MMDA . . . . . . . . . . . . . . 610,553
Time Deposits $100,00 and Over . 326,674
All Other Time Deposits . . . . . 1,551,426
Total Deposits . . . . . . . . . 5,032,150
Short Term Borrowings . . . . . . . 965,673
Long Term Debt . . . . . . . . . . 11,790
Acceptances Outstanding . . . . . . 3,026
Other Liabilities . . . . . . . . . 59,541
Total Liabilities . . . . . . . 6,072,180

SHAREHOLDER'S EQUITY:
Common Stock . . . . . . . . . . . . . . 18,200
Surplus . . . . . . . . . . . . . . . . 167,889
Retained Earnings . . . . . . . . . . . 371,649
Total Shareholder's Equity . . . . 557,738

Total Liabilities and
Shareholder's Equity . . . . . 6,629,918

-46-
<PAGE>

<PAGE>

INDENTURE dated as of February , 1994 between AMERICAN FINANCIAL
CORPORATION, an Ohio corporation ("Corporation"), and STAR BANK, NATIONAL
ASSOCIATION, a national banking association organized under the laws of the
United States ("Trustee").

Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Corporation's 9-
1/2% Debentures due April 20, 2004 ("Securities"):

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions

"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Corporation.

"Board of Directors" means the Board of Directors of the Corporation
or any authorized committee of the Board.

"Corporation" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.

"Debt" or "Indebtedness" means any indebtedness for borrowed money or
evidenced by a note, debenture or a similar instrument (including a
purchase money obligation) given in connection with the acquisition of any
property or assets, including securities, or any guarantee of such
indebtedness.

"Default" means any event which is, or after notice or lapse of time
or both would be, an Event of Default.

"Holder" or "Securityholder" means the person in whose name a security
is registered on the Registrar's books.

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<PAGE>

"Indenture" means the Indenture as amended or supplemented from time
to time.

"Lien" means any mortgage, pledge, security interest or lien.

"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary or the Controller of the
Corporation.

"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer, Assistant Secretary or Assistant
Controller of the Corporation.

"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to
the Corporation.

"Principal" of a Security means the amount stated as principal on the
face of the Security plus, when appropriate, the premium on the Security.

"SEC" means the Securities and Exchange Commission.

"Securities" means the Corporation's 9-1/2% Debentures due April 20,
2004, as amended or supplemented from time to time that are issued under
the Indenture.

"Subsidiary" means a corporation of which the Corporation, the
Corporation and one or more Subsidiaries, or one or more Subsidiaries at
the time own a majority of that corporation's outstanding stock having
voting power under ordinary circumstances to elect a majority of that
corporation's board of directors.

"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77 aaa
et seq.) as in effect on the date of this Indenture.

"Trustee" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.

"Trust Officer" means any officer or assistant officer of the Trustee
authorized by the Trustee to administer its corporate trust matters.

Section 1.02. Other Definitions

Term Defined in Section

"Bankruptcy Law" 6.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 10.08
"Paying Agent" 2.03
"Registrar" 2.03
"U.S. Government Obligations" 8.01

Section 1.03. Incorporation by Reference of Trust Indenture Act

Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this

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<PAGE>

Indenture. The following TIA Terms used in this Indenture have the
following meanings:

"Commission" means the SEC.

"Indenture securities" means the Securities.

"Indenture securityholder" means a Holder or a Securityholder.

"Indenture to be qualified" means this Indenture.

"Indenture trustee" or "institutional trustee" means the Trustee.

"Obligor on the indenture securities" means the Corporation.

All other terms used in the Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them.

Section 1.04. Rules of Construction

Unless the context otherwise requires:

(1) the terms and provisions of the Securities described in the form
of security, attached as Exhibit A, shall be binding upon the
Holders and the Corporation as if such terms and provisions were
contained in this Indenture;

(2) a term has the meaning assigned to it;

(3) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting
principles;

(4) "or" is not exclusive; and

(5) words in the singular include the plural, and in the plural
include the singular.

ARTICLE 2

THE SECURITIES

Section 2.01. Form and Dating

The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, which is incorporated in and
made a part of this Indenture. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage. The
Corporation shall approve the form of the Securities and any notation,
legend or endorsement on them. Each Security shall be dated the date of
its authentication.

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<PAGE>

Section 2.02. Execution and Authentication

Two Officers shall sign the Securities for the Corporation by
facsimile signature. The Corporation's seal shall be reproduced on the
Securities. Temporary securities may be manually signed by two Officers of
the Corporation and manually imprinted with the Corporation's seal.

If an Officer who signed a Security no longer holds that office at the
time the Trustee authenticates and delivers the Security, it shall be valid
nevertheless.

A Security shall not be valid until authenticated by the manual
signature of the Trustee or an Authenticating Agent which may be appointed
by the Corporation in its sole discretion. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.

The Trustee or Authenticating Agent shall authenticate and deliver
from time to time the Securities for original issue up to the aggregate
principal amount of $750,000,000 upon a written order of the Corporation
signed by two Officers or by an Officer and an Assistant Treasurer of the
Corporation. Such written order shall specify the amount of Securities to
be authenticated and the date on which the original issue of the Securities
shall be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $750,000,000 except as provided in
Sections 2.07 and 2.08.

By executing this Indenture, the Corporation appoints Securities
Transfer Company, an Ohio limited partnership, as Authenticating Agent
under this Indenture.

Section 2.03. Registrar and Paying Agent

The Corporation shall designate a Registrar who shall maintain an
office or agency where Securities may be presented for registration of
transfer or for exchange ("Registrar") and a paying agent who shall
maintain an office or agency where Securities may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Corporation may have one or more
co-Registrars and one or more Paying Agents. The term Paying Agent
includes all Paying Agents. If the Paying Agent is not the Trustee, the
Paying Agent shall promptly notify the Trustee of the failure of the
Corporation to make any payments required by this Indenture.

The corporation shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-Registrar not a party to this Indenture.
Each such agreement shall implement the provisions of this Indenture that
relate to such agent. The Corporation shall notify the Trustee of the name
and address of any such agent. If the Corporation fails to maintain a
Registrar or Paying agent, the Trustee shall act as such.

The Corporation initially appoints Securities Transfer Company, an
Ohio limited partnership, Cincinnati, Ohio, as Registrar and Paying Agent.

Section 2.04. Paying Agent to Hold Money in Trust

Each Paying Agent shall hold in trust for the benefit of Securityhold-
ers or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Securities, and shall notify

4
<PAGE>

the Trustee of any default by the Corporation in making any such payment.
If the Corporation or a Subsidiary acts as Paying Agent, it shall segregate
such money and hold it as a separate trust fund. The Corporation at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon doing so, the Paying Agent shall have no further liability for such
money.

Section 2.05. Securityholder Lists

The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Securityholders. If the Trustee is not the Registrar, the Corporation
shall furnish or cause to be furnished to the Trustee on or before the
tenth day preceding each semiannual interest payment date as of the
fifteenth day preceding such interest payment date, and at such other times
as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.

Section 2.06. Transfer and Exchange

When a Security is presented to the Registrar or a co-Registrar with a
request to register a transfer, the Registrar shall register the transfer
as requested if its requirements for such transactions are met. When
Securities are presented to the Registrar or a co-Registrar with a request
to exchange them for an equal principal amount of Securities, the Registrar
shall make the exchange as requested if the same requirements are met. To
permit transfers and exchanges, the Corporation shall execute and the
Trustee shall authenticate and deliver Securities at the Registrar's
request upon surrender of presented Securities to the Trustee. Any
exchange or transfer shall be without charge, except that the Corporation
may require payment of a sum sufficient to cover any tax or other govern-
mental charge that may be imposed in connection with any transfer. The
Registrar need not transfer or exchange any Securities for a period of 15
days before a selection of Securities to be redeemed and the mailing of
notice of redemption.

Section 2.07. Replacement Securities

If the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Corporation shall issue and the Trustee
shall authenticate and deliver a replacement Security if the Trustee's
requirements are met. Such Holder shall furnish an indemnity bond suffi-
cient in the judgment of the Corporation and the Trustee to protect the
Corporation, the Trustee, any Paying Agent, the Registrar or any co-Regist-
rar from any loss which any of them may suffer if a Security is replaced.
The Corporation may charge such Holder for its expenses in replacing a
Security.

Section 2.08. Outstanding Securities

Securities outstanding at any time are all Securities authenticated
and delivered by the Trustee or Authenticating Agent except for those
cancelled by them and those described in this Section as not outstanding.
Except for the purposes of Section 10.06 hereof, securities outstanding
include those held by the Corporation or its Affiliates.

If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding.

5
<PAGE>

If the Paying Agent holds on a redemption date or maturity date money
sufficient to pay Securities payable on that date, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue. Such Securities carry no rightsexcept the right to receive payment.

Section 2.09. Cancellation

The Corporation at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or
payment. The Trustee and no one else shall cancel and destroy any Securi-
ties surrendered for transfer, exchange, payment or cancellation. The
Corporation may not issue new Securities to replace Securities it has paid
or delivered to the Trustee for cancellation.

Section 2.10. Temporary Securities

Until definitive Securities are ready for delivery, the Corporation
may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Corporation considers appropri-
ate for temporary Securities. Without unreasonable delay, the Corporation
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.

Section 2.11. Defaulted Interest

If the Corporation defaults in a payment of interest on the Securi-
ties, it shall pay the defaulted interest, plus (to the fullest extent
permitted by applicable law) any interest payable on the defaulted inter-
est, compounded semi-annually, to the persons who are Securityholders on a
subsequent special record date, and such term, as used in this Section 2.11
with respect to the payment of any defaulted interest, shall mean the
fifteenth day next preceding the date fixed by the Corporation for the
payment of defaulted interest, whether or not such day is a Business Day.
At least 15 days before the record date, the Corporation shall mail to each
securityholder a notice that states the record date, the payment date and
the amount of defaulted interest to be paid.

ARTICLE 3

COVENANTS

Section 3.01. Payment of Principal and Interest on Securities

The Corporation shall pay the principal of, premium, if any, and
interest on the securities by depositing with the Trustee and/or Paying
Agent the funds required therefor, in immediately available funds, one full
business day prior to the date due as provided in the Securities and the
Indenture.

The Corporation shall pay interest on overdue principal at 9-1/2%; it
shall pay interest on overdue installments of interest at the same rate,
compounded semi-annually, to the extent lawful.

Section 3.02. Maintenance of Property

The Corporation will at all times cause all buildings, plants,
machinery, equipment or other tangible personal property operated by it or

6
<PAGE>

any Subsidiary to be maintained and kept in such condition, repair and
working order as in the judgment of the Corporation is necessary in the
interest of the business of the Corporation as a whole. Nothing contained
in this section 3.02 shall prevent or restrict the sale, abandonment or
other disposition of any building, plant, machinery, equipment or other
tangible personal property.

Section 3.03. Insurance

The Corporation will, and will cause each Subsidiary to, insure its
properties (to the extent properties of such character are customarily
insured) with responsible insurers and in an adequate amount, against loss
or damage by fire and other risks against which insurance is usually
carried by companies similarly situated as in the judgment of the Corpora-
tion is necessary in the interest of the business of the Corporation as a
whole.

Section 3.04. Compliance Certificate

The Corporation shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Corporation an Officers' Certificate stating
whether or not to the best of their knowledge the signers know of any
default by the Corporation in performing its covenants or obligations under
this Indenture. The signers must be officers of the Corporation who would,
in the normal performance of their duties, obtain knowledge of the Corpora-
tion's failure to perform its covenants or obligations or of any default
under this Indenture. If they do know of such a default, the certificate
shall describe the default and what action the Corporation is proposing to
take with respect thereto. The certificate shall comply with Section
10.05. The first certificate shall be delivered to the Trustee by April
30, 1995. In addition, the Corporation shall notify the Trustee of an
Event of Default within seven days of such Event of Default.

Section 3.O5. SEC Reports

The Corporation shall file with the Trustee, within 15 days after it
files them with the SEC, copies of the annual reports and of the informa-
tion, documents and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the
Corporation is required to file with the SEC pursuant to Section 13(a) or
15(d) of the securities Exchange Act of 1934. The Corporation also shall
comply with the other provisions of TIA Section 314(a).

Section 3.06. No Lien Created

This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Corporation or any Subsidiary.

7
<PAGE>

Section 3.07. Corporate Existence

Subject to the provisions of Article 5 hereof, the Corporation will do
or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.

ARTICLE 4

REDEMPTION

Section 4.01. Optional Redemption

On or after April 20, 1999, the Corporation may redeem any or all of
the Securities at any time or some of them from time to time at the
following prices (expressed as percentages of principal amount), plus
accrued interest to the redemption date.

If redeemed on or after April 20 of:

Year Percentage Year Percentage

1999 104.75% 2001 101.75%
2000 103.25% 2002 and thereafter 100.00%

Section 4.02. Selection of Securities to be Redeemed

If less than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed by lot, at its discretion. The
Trustee may select for redemption portions of the principal of Securities
that have a denomination larger than $1,000. Securities and portions of
them it selects shall be in amounts of $1,000 or a multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption.

Section 4.03. Notice of Redemption

At least 30 days but not more than 60 days before a redemption date,
the Corporation shall mail a notice of redemption by first-class mail to
each Holder of Securities to be redeemed. At least 15 days prior to the
mailing of such a notice to each Holder of Securities to be redeemed, the
Corporation shall deliver to the Trustee notice of the redemption date and
principal amount of Securities to be redeemed.

The notice shall identify the Securities to be redeemed and shall
include:

(l) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price; and
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date.

At the Corporation's request, the Trustee shall give the notice of
redemption in the Corporation's name and at the Corporation's expense.

8
<PAGE>

Section 4.04. Deposit of Redemption Price

Prior to the redemption date, the Corporation shall deposit with the
Paying Agent, in immediately available funds, money sufficient to pay the
redemption price of and accrued interest on all Securities to be redeemed
on that date.

Section 4.05. Effect of Notice of Redemption

Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the applicable
redemption price. Upon surrender to the Paying Agent, such Securities
shall be paid at such redemption price, plus accrued interest to the
redemption date; provided, however, that if the redemption date is also an
interest payment date, interest accrued on the Securities shall be paid by
check as provided in paragraph 2 of the Security to Holders of record on
the regular record date for such interest payment date.

Section 4.06. Securities Redeemed in Part

Upon surrender of a Security that is redeemed in part only, the
Trustee or the Authenticating Agent shall authenticate, at the expense of
the Corporation, for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.

ARTICLE 5

SUCCESSOR CORPORATION

The Corporation shall not consolidate with or merge into, or transfer
all or substantially all of its assets to, another corporation unless (i)
the resulting, surviving or transferee corporation is organized and
existing under the laws of the United States or a state thereof or the
District of Columbia and assumes by supplemental indenture all the obliga-
tions of the Corporation under the Securities and this Indenture, (ii)
immediately after giving effect to such transaction no Event of Default and
no circumstances which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and, (iii) the
Corporation shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture comply with this Indenture, and
thereafter all such obligations of the Corporation shall terminate.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default

An "Event of Default" occurs if:

(1) the Corporation defaults in the payment of interest on any
Security when the same becomes due and payable and the default continues
for a period of 30 days;

(2) the Corporation defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon redemption

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<PAGE>

(including payment of any premium pursuant to Section 4.01 of the Inden-
ture) or otherwise, and the default continues for a period of 20 days;

(3) the Corporation fails to comply with any of its other agreements
in the Securities or this Indenture and the default continues after the
Trustee or the Holders of at least 25% in outstanding principal amount of
the Securities notify the Corporation of the default and the Corporation
does not cure the default within 90 days. The notice must specify the
default, demand that it be remedied and state that the notice is a "Notice
of Default."

(4) the Corporation pursuant to or within the meaning of any Bank-
ruptcy Law:

(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a Custodian of it or for any
substantial part of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) fails generally to pay its debts as they become due, or

(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

(a) is for relief against the Corporation in an involuntary
case,
(b) appoints a Custodian of the Corporation or for any substan-
tial part of its property, or
(c) orders the liquidation of the Corporation, and the order or
decree remains unstayed and in effect for 90 days; or

(6) there has occurred an event of default, as defined in any bond,
mortgage, indenture or other instrument under which the Corporation has
issued or may in the future issue any Debt in excess of $10,000,000, and
such an event of default may result in such Debt becoming due prior to its
stated maturity and has not been cured within 30 days after proper notice
to the Corporation of such event of default by the holders of 25% of the
outstanding principal amount of such Debt or by the trustee of such Debt;
or

(7) the Corporation fails to pay within 20 days after the stated
maturity of any Debt in excess of $10,000,000, whether presently issued or
issued in the future.

The foregoing notwithstanding, it shall not be an "Event of Default"
if there occurs an event of default, as defined in any bond, mortgage,
indenture or other instrument under which the Corporation has incurred or
may in the future incur any obligation provided that such obligation is
nonrecourse to the Corporation.

The terms "Bankruptcy Law" means Title 11, United States Code or any
similar Federal or State law for the relief of debtors. The term "Custodi-
an" means any receiver, trustee, assignee, liquidator or similar official
under any Bankruptcy Law.

Section 6.02. Acceleration

10
<PAGE>

If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in outstanding principal amount of the Securities
by notice to the Corporation may declare the principal of and accrued
interest on all the Securities to be due and payable immediately. Upon a
declaration such principal and interest shall be due and payable immediate-
ly.

The Holders of a majority in principal amount of the securities by
notice to the Trustee may rescind an acceleration and its consequences if
(i) all existing Events of Default have been cured or waived (other than
non-payment of the principal or interest of the Securities which have
become due solely by such declaration of acceleration), and (ii) if the
rescission would not conflict with any judgment or decree.

Section 6.03. Other Remedies

If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. No
remedy is exclusive of any other remedy. All available remedies are
cumulative.

Section 6.04. Waiver of Past Defaults

Subject to Sections 6.02 and 9.02 the Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences. When a
Default or Event of Default is waived, it is cured and stops continuing.

Section 6.05. Control by Majority

The Holders of a majority in principal amount of the outstanding
Securities may direct the time, method and place of conducting any proceed-
ing for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with applicable law or this Indenture, that is
unduly prejudicial to the rights of other Securityholders, or that may
involve the Trustee in personal liability.

Section 6.06. Limitation on Suits

A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:

(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;

(2) the Holders of at least 25% in outstanding principal amount of
the Securities make a written request to the Trustee to pursue
the remedy;

(3) such Holder or Holders offer to the Trustee indemnity satisfacto-
ry to the Trustee against any loss, liability or expense; and

11
<PAGE>

(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity.

A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over any other
Securityholder.

Section 6.07. Rights of Holders to Receive Payment

Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal and interest on
the Security, on or after the respective due dates expressed in the
Security, or to bring suit for the enforcement of any such payment on or
after such respective dates, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.

Section 6.08. Collection Suit by Trustee

If a default in payment of principal of the Securities occurs and is
continuing, or if a default in payment of interest on the Securities as
specified in Section 6.01(1) occurs and is continuing, the Trustee may
recover judgment, in its own name and as trustee of an express trust,
against the Corporation for the whole amount of principal and interest
remaining unpaid.

Section 6.09. Trustee May File Proofs of Claim

The Trustee may file such proofs of claim and other papers or docu-
ments as may be necessary or advisable in order to have the claims of the
Trustee and the Securityholders allowed in any judicial proceedings
relative to the Corporation, its creditors or its property.

Section 6.10. Priorities

If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:

First: to the Trustee for amounts due under Section 7.07;

Second: to Securityholders for amounts due and unpaid on the Secu-
rities for principal and interest and interest on overdue
interest, said principal and interest to be paid ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and
interest, respectively; and

Third: to the Corporation, the unpaid amount of such money.

The Trustee may fix a record date and payment date for any such
payment to Securityholders.

Section 6.11. Undertaking for Costs

In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing
by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, includ-
ing reasonable attorneys' fees, against any party litigant in the suit,

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<PAGE>

having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders
of more than 10% in outstanding principal amount of the Securities.

Section 6.12. Rights and Remedies Cumulative

Except as provided in Section 6.06, no right or remedy herein con-
ferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.

Section 6.13. Delay or Omission Not Waiver

No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Subject to Section 6.06, every right and remedy
given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.

ARTICLE 7

TRUSTEE

Section 7.01. Duties of Trustee

(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers and use the same
degree of care and skill in its exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs.

(b) Except during the continuance of an Event of Default:

(l) The Trustee need perform only those duties that are specifi-
cally set forth in this Indenture and no others.

(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and
correctness of the opinions expressed therein, upon certifi-
cates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this
Indenture.

(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:

(l) This paragraph does not limit the effect of paragraph (b) of
this Section.

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(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts.

(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.

(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Paragraphs (a), (b) and (c) of this Sec-
tion.

(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against
any loss, liability or expense.

(f) The Trustee, in its capacity as Trustee or Paying Agent, shall
not be liable to pay interest on any money received by it except
as otherwise agreed with the Corporation.

Section 7.02. Rights of Trustee

(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the
document.

(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on the Officers' Certificate or Opinion of
Counsel.

(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due
care.

(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or
within its rights or powers.

Section 7.03. Trustee's Disclaimer

The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Corporation's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its certificate
of authentication.

Section 7.04. Individual Rights of Trustee. etc.

The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Corporation
with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar or co-Registrar may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.

Section 7.05. Notice of Defaults

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<PAGE>

If a Default occurs and is continuing and if it is actually known to
the Trustee, the Trustee shall mail to each Securityholder notice of the
Default within 90 days after it becomes known to the Trustee. Except in
the case of a default in payment of the principal of or interest on any
Security, the Trustee may withhold the notice if and so long as the Board
of Directors of the Trustee, Executive Committee thereof, or a trust
committee of directors and/or responsible officers of the Trustee, in good
faith determines that withholding the notice is in the interest of the
Securityholders. The Trustee shall not be deemed to have actual knowledge
of an event or circumstance for purposes of this Indenture unless it shall
have received written notice thereof from the Corporation or a
Securityholder.

Section 7.06. Reports by Trustee to Holders

Within 60 days after each May 15 beginning with May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b).

A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities
are listed.

Section 7.07. Compensation and Indemnity

The Corporation shall pay to the Trustee from time to time reasonable
compensation for its services. The Corporation shall reimburse the Trustee
upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses may include the reasonable compensation and expenses of the
Trustee's agents and attorneys. The Corporation shall indemnify the
Trustee against any loss or liability incurred by it. The Trustee shall
notify the Corporation promptly of any claim for which it may seek
indemnity. The Corporation need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence or
bad faith.

To secure the Corporation's payment obligations in this section, the
Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay
principal of, or premium, if any, or interest on particular Securities.

Section 7.08. Replacement of Trustee

The Trustee may resign by so notifying the Corporation. The Holders
of a majority in principal amount of the outstanding Securities may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee
with the Corporation's consent. The Corporation may remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged a bankrupt or an insolvent;

(3) a receiver or other public officer takes charge of the
Trustee or its property; or

(4) the Trustee otherwise becomes incapable of acting.

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<PAGE>

If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, and the Holders have not approved a
successor Trustee, the Corporation shall promptly appoint a successor
Trustee.

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Corporation. Immediately
after that, the retiring Trustee shall transfer all property held by it as
Trustee to the successor Trustee, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, power and duties of the Trustee under this Indenture.
A successor Trustee shall mail notice of its succession to each
Securityholder.

If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the
Corporation or the Holders of a majority in outstanding principal amount of
the Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

If the Trustee, after notice, fails to comply with Section 7.10, any
Securityholder who has been a Holder for at least six months may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

Section 7.09. Successor Trustee by Merger, etc.

If the Trustee consolidates with, merges or converts with or into, or
transfers all or substantially all of its corporate trust assets to,
another corporation, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualifications

This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a) (1). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b) (1). For purposes of complying with TIA
Section 310(b) (1), the Trustee states that it is Trustee under the
indentures relating to the 10% Debentures due April 20, 1999, 10% Series A
Debentures due October 20, 1999, 10% Series B Debentures due October 20,
1999, 12% Debentures due September 3, 1999, 12% Series A Debentures due
September 3, 1999, 12% Series B Debentures due September 3, 1999, 13-1/2%
Debentures due September 14, 2004, 13-1/2% Debentures Series A due
September 14, 2004 and 12-1/4% Debentures due September 15, 2003, which are
presently in effect and excluded from the operation of TIA Section 310(b)
(1).

Section 7.11. Preferential Collection of Claims Against
Corporation

The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.

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ARTICLE 8

DISCHARGE OF INDENTURE

Section 8.01. Termination of Corporation's Obligations

The Corporation may terminate all of its obligations under the
Securities and this Indenture if:

(1) all Securities previously authenticated and delivered (other than
destroyed, lost or stolen Securities which have been replaced or paid) have
been delivered to the Trustee for cancellation, or

(2) the Corporation deposits with the Trustee money or U.S.
Government Obligations sufficient to pay all remaining installments of
principal and interest when due as provided in Paragraph 11 of the
Securities. However, the Corporation's obligations in Paragraph 10 of the
Securities and in Section 2.03, 2.04, 2.05, 2.06, 2.07, 6.07 and 7.07 of
this Indenture shall survive until the Securities are no longer
outstanding. Thereafter the Corporation's obligations in such Paragraph 10
and in such Sections 6.07 and 7.07 shall survive.

Before or after such a deposit the Corporation may make arrangements
satisfactory to the Trustee for the redemption of securities at a future
date in accordance with Article 4.

After a deposit pursuant to the second paragraph of this Section, the
Trustee shall acknowledge in writing the discharge of the Corporation's
obligations under the Securities and this Indenture except for those
surviving obligations specified above.

An installment of interest shall be considered paid on the date it is
due if the Trustee or Paying Agent holds on that date money sufficient to
pay the installment.

In order to have money available on payment dates to pay principal or
interest on the Securities, U.S. Government Obligations shall be payable as
to principal or interest on or before such payment dates in such amounts as
will provide the necessary money. U.S. Government Obligations deposited
with the Trustee shall be obligations which are not callable at the
issuer's option.

"U.S. Government Obligations" means:

(1) direct obligations of the United States for the payment of which
its full faith and credit is pledged; or

(2) obligations of a person controlled or supervised by and acting as
an agency or instrumentality of the United States the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States.

Section 8.02. Application of Trust Money

The Trustee shall hold in trust money deposited with it pursuant to
Section 8.01. It shall apply the deposited money through the Paying Agent
and in accordance with this Indenture to the payment of principal and
interest on the Securities.

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<PAGE>

Section 8.03. Repayment to Corporation

The Trustee and the Paying Agent shall promptly pay to the Corporation
any excess money or deliver securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Corporation any money held by
them for the payment of principal or interest that remains unclaimed for
two years unless some other disposition of such unclaimed money is required
by applicable law.

Section 8.04. Reinstatement

If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Corporation's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 8.01; provided, however, that if the Corporation
has made any payment of interest on or principal of any Securities because
of the reinstatement of its obligations, the Corporation shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.

ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01. Without Consent of Holders

The Corporation and the Trustee may amend or supplement this Indenture
or the Securities without notice to or consent of any securityholder:

(1) to cure any ambiguity, defect or inconsistency;

(2) to comply with Article 5; or

(3) to make any change that does not adversely affect the
rights of any Securityholder.

The Trustee may waive compliance by the Corporation with any provision
of this Indenture or the Securities without notice to or consent of any
Securityholder if it is presented with an Opinion of Counsel, which Opinion
of Counsel shall be satisfactory to the Trustee, to the effect that the
waiver does not adversely affect the rights of any Securityholder.

Section 9.02. With Consent of Holders

The Corporation and the Trustee may amend or supplement this Indenture
or the securities without notice to any Securityholder but with the written
consent of the Holders of a majority in principal amount of the outstanding
Securities. The Holders of a majority in principal amount of the
outstanding Securities may waive compliance by the Corporation in a
particular instance with any provision of this Indenture or the Securities
without notice to any Securityholder. However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a

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<PAGE>

waiver pursuant to Section 6.04 or rescission pursuant to Section 6.02, may
not:

(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;

(2) reduce the rate of or extend the time for payment of interest on
any Security;

(3) reduce the principal of or extend the fixed maturity of any
Security;

(4) make any Security payable in money other than that stated in the
Security; or

(5) waive a default in the payment of the principal of or interest on
any Security.

Section 9.03. Compliance With Trust Indenture Act

Every amendment to or supplement of this Indenture or the Securities
shall comply with the Trust Indenture Act of 1939 as then in effect and
shall be authorized by a resolution of the Corporation's Board of Directors
and agreed to by the Trustee.

Section 9.04. Revocation and Effect of Consents

A consent to an amendment, supplement or waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting
Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security. The Trustee must
receive the notice of revocation before the date the amendment, supplement
or waiver becomes effective. An amendment, supplement or waiver shall
become effective on receipt by the Trustee of written consents from the
Holders of the requisite percentage in principal amount of the outstanding
securities.

After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it makes a change described in Clauses
(1), (2), (3), (4) or (5) of Section 9.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented
to it and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security.

Section 9.05. Notation on or Exchange of Securities

If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on Security about
the changed terms and return it to the Holder. Alternatively, if the
Corporation or the Trustee so determine, the Corporation in exchange for
the Security shall issue and the Trustee shall authenticate a new Security
that reflects the changed terms.

Section 9.06. Trustee to Sign Amendments. etc.

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<PAGE>

The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if it is presented with an Opinion of Counsel,
which Opinion of Counsel shall be satisfactory to the Trustee, to the
effect that the amendment, supplement or waiver does not adversely affect
the rights of the Trustee. The Corporation may not sign an amendment or
supplement until the Board of Directors approves it.

ARTICLE 10

MISCELLANEOUS

Section 10.01. Trust Indenture Act Controls

If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture
by the TIA, the required provision shall control.

Section 10.02. Notices

Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by first-class mail addressed as follows:

If to the Corporation: American Financial Corporation
One East Fourth Street
Cincinnati, Ohio 45202

Attention: Secretary

If to the Trustee: Star Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202

Attention: Corporate Trust
Services Department

The Corporation or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

Any notice or communication mailed to a Securityholder shall be mailed
to him at his address as it appears on the registration books of the
Registrar, or to such address as a Securityholder has supplied to the
Trustee within two years preceding the date of such notice or to such
Securityholders for whom names and addresses have been supplied to the
Trustee pursuant to TIA Section 312. Such notice shall be sufficiently
given to him if so mailed within the time prescribed.

Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.

Section 10.03. Communication by Holders With Other Holders

Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Corporation, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).

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<PAGE>

Section 10.04. Certificate and Opinion of Counsel as to Conditions Prece-
dent

Upon any request or application by the Corporation to the Trustee to
take any action under this Indenture, the Corporation shall furnish to the
Trustee:

(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and

(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.

Each Officers' Certificate and Opinion of Counsel shall be in writing.
The legal counsel who renders it may be an employee of or counsel to the
Corporation. The legal counsel shall be acceptable to the Trustee.

Section 10.05. Statements Required in Certificate or Opinion of Counsel

Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture
shall include:

(1) a statement that the person making such certificate or opinion
has read such covenant or condition;

(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;

(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and

(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.

Section 10.06. When Treasury Securities Disregarded

In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, or consent, or waiver,
Securities owned by the Corporation or by any Affiliate shall be
disregarded, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction or consent,
only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding
at the time shall be considered in any such determination.

Section 10.07. Rules by Trustee, Paying Agent, Registrar

The Trustee may make reasonable rules for the administration of this
Indenture. Such rules may cover matters relating to action by or a meeting
of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.

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<PAGE>

Section 10.08. Legal Holidays

A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or a day on
which banking institutions are not required to be open in Cincinnati, Ohio.
If a date for a payment of principal, premium, if any, or interest is a
Legal Holiday at a place of payment, payment may be made at that place on
the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.

Section 10.09. Governing Law

This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of Ohio.

Section 10.10. No Adverse Interpretation of Other Agreements

This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Corporation or a Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

Section 10.11. No Recourse Against Others

All liability described in Paragraph 16 of the Securities of any
director, officer, employee or stockholder, as such, of the Corporation is
waived and released.

Section 10.12. Successors

All agreements of the Corporation in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successors.

Section 10.13. Duplicate Originals

The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the
same agreement.

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<PAGE>

SIGNATURES

DATED: AMERICAN FINANCIAL CORPORATION

As of February , 1994

By:
Fred J. Runk
Vice President &
Treasurer

ATTEST:

James C. Kennedy, Secretary

DATED: STAR BANK, NATIONAL ASSOCIATION

As of February , 1994

By:
Title:

23
<PAGE>

EXHIBIT A

Registered Registered
No.______ $__________________

CUSIP _________

AMERICAN FINANCIAL CORPORATION

9-1/2% Debentures Due April 20, 2004

American Financial Corporation, a corporation duly organized and
existing under the laws of the State of Ohio (herein referred to as the
"Company"), for value received, hereby promises to pay to

or registered assigns, the principal sum of DOLLARS
on April 20, 2004 and to pay interest on said principal sum at the rate per
annum specified above in semiannual payments on April 20 and October 20,
commencing October 20, 1994 to holders of record on the preceding April 1
and October 1, respectively. Reference is hereby made to the further
provisions of this Security as set forth on the following pages hereof.

This Security shall not be valid unless the certificate of
authentication hereof has been executed by the Trustee or an Authenticating
Agent appointed by the Company.

In Witness Whereof, American Financial Corporation has caused this
instrument to be signed by its President by a facsimile of his signature
and has caused a facsimile of its corporate seal to be imprinted hereon,
attested by its Secretary by facsimile signature.

Dated: ___________________, 1994
AMERICAN FINANCIAL CORPORATION

BY:___________________________
Ronald F. Walker,President

BY:
James C. Kennedy, Secretary

CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to
in the within-mentioned Indenture.

BY: _____________________________________________
Authorized Signer

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<PAGE>

AMERICAN FINANCIAL CORPORATION
9-1/2% Debentures Due April 20, 2004

1. Interest

American Financial Corporation ("Company"), an Ohio corporation,
promises to pay interest on the principal amount of this Security at the
rate per annum shown above. The Company will pay interest semiannually on
April 20 and October 20 of each year, commencing October 20, 1994.
Interest on the Security will initially accrue from April 20, 1994 and
thereafter from the most recent date to which interest has been paid.
Interest on the Security shall be computed on the basis of a 365 or 366 day
year, as appropriate, except that semiannual interest payments will be
one-half of the annual interest.

2. Method of Payment

The Company will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the
close of business on April 1 or October 1 next preceding the interest
payment date even though Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities
to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However,
the Company may pay principal and interest by check payable in such money.
It may mail an interest check to a holder's registered address.

3. Authenticating Agent, Paying Agent and Registrar

Initially, Securities Transfer Company, One East Fourth Street,
Cincinnati, Ohio 45202, will act as Authenticating Agent, Paying Agent and
Registrar. The Company may change any Authenticating Agent, Paying Agent,
Registrar or co-Registrar without notice. The Company or any of its
Subsidiaries may act as Authenticating Agent, Paying Agent, Registrar or
co-Registrar.

4. Indenture

The Company issued the Securities under an Indenture dated as of
February , 1994 (the "Indenture"), between the Company and Star Bank,
National Association ("Trustee"). The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-bbb)
as in effect on the date of the Indenture. The Securities are subject to
all terms of the Indenture, and Securityholders are referred to the
Indenture and the Act for a statement of them. The Securities are general
unsecured obligations of the Company limited to an aggregate principal
amount of $750,000,000 which may be issued pursuant to the Indenture.
Securityholders may inspect the Indenture at the principal executive office
of the Company. The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture. Such requests shall be
directed to the Company at One East Fourth Street, Cincinnati, Ohio 45202.
Attention: Treasurer.

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<PAGE>

5. Optional Redemption

On or after April 20, 1999, the Company may redeem any or all of the
Securities at any time or some of them from time to time at the prices
(expressed as a percentage of principal amount) set forth below if redeemed
during the period beginning on April 20 of the years indicated below plus
accrued interest to the redemption date:

Year Percentage

1999 104.75%
2000 103.25%
2001 101.75%
2002 and thereafter 100.00%

6. Notice of Optional Redemption

Notice of optional redemption will be mailed at least 30 days but not
more than 60 days before the optional redemption date to each holder of
Securities to be redeemed at his registered address. Securities in a
denomination larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. On the optional redemption date, interest will cease
to accrue on Securities or portions of Securities called for redemption.

If less than all the Securities are to be redeemed, the Trustee shall
select by lot the Securities to be redeemed.

7. Maturity

The Company will redeem all Securities outstanding on April 20, 2004
at a redemption price of 100% of principal amount, plus accrued interest to
the redemption date.

8. Denominations, Transfer, Exchange

The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. The transfer of Securities may be
registered and Securities may be exchanged as provided in the Indenture.
The Registrar may require a holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Securities for a period of 15 days
before a selection of securities to be redeemed and the mailing of the
notice of redemption.

9. Persons Deemed Owners

The registered holder of a Security may be treated as its owner for
all purposes.

26
<PAGE>

10. Unclaimed Money

If money for the payment of principal, premium or interest remains
unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company unless some other disposition of such unclaimed money
is required by applicable law. After that, holders entitled to the money
must look to the Company for payment unless an unclaimed property law
designates another person.

11. Discharge Prior to Maturity

If the Company at any time deposits with the Trustee money or U.S.
Government Obligations sufficient to pay principal and interest on the
Securities to redemption or maturity, the Company will be discharged from
the Indenture and the Securities, and holders must look only to the
deposited money and securities for payment. U.S. Government Obligations
are securities backed by the full faith and credit of the United States.

12. Amendment, Supplement and Waivers

Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the holders of a majority in
principal amount of the outstanding Securities, and any past default or
compliance with any provision may be waived with the consent of the holders
of a majority in outstanding principal amount of the Securities. Without
the consent of any Securityholder, the Company and the Trustee may amend or
supplement the Indenture to cure any ambiguity, defect or inconsistency or
to make any change that does not adversely affect the rights of any
Securityholder.

13. Covenants

The Company will at all times cause all buildings, plants, machinery,
equipment or other tangible personal property operated by it or any
subsidiary to be maintained and kept in such condition, repair and working
order as in the judgment of the Company is necessary in the interest of the
business of the Company as a whole, but nothing shall prevent or restrict
the sale, abandonment or other dispositions of any building, plant, machin-
ery, equipment or other tangible personal property. The Indenture does not
restrict the amount of indebtedness the Company may incur or the amount it
may pay as dividends or other distributions on the Company's common or
preferred stock.

14. Successor Company

When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor
corporation will be released from those obligations.

15. Defaults and Remedies

An Event of Default is failure to pay interest on the Securities when
due for a period of 30 days; failure to pay principal when the same becomes
due for a period of 20 days; failure by the Company for 60 days after
notice to it by the Trustee or the holders of at least 25% in principal
amount of the Securities to comply with any of its other agreements in the
Indenture or the Securities; the acceleration of, or the occurrence of
circumstances (which have not been cured within 20 days) permitting the

27
<PAGE>

acceleration of, other Debt, as defined in the Indenture, of the Company in
excess of $10,000,000; failure by the Company to pay any Debt in excess of
$10,000,000 within 20 days of its stated maturity; certain judgments
remaining undischarged for 60 days; and certain events of bankruptcy or
insolvency. If an Event of Default occurs and is continuing, the Trustee
or the holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and immediately payable.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnification satisfactory to it.
Subject to certain limitations, holders of a majority in outstanding
principal amount of the Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing default (except a default in payment of principal,
premium or interest) if it determines that withholding notice is in the
Securityholders' interest. The Company must furnish an annual compliance
certificate to the Trustee.

16. No Recourse Against Others

A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by
accepting a Security waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Security.

17. Trustee Dealings with the Company

Star Bank, National Association, the Trustee under the Indenture, or
any Trustee may act as Trustee in connection with issues of indebtedness
issued by the Company and, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Company
or its Affiliates (as defined in the Indenture), and may otherwise deal
with the company or its affiliates, as if it were not Trustee.

18. Authentication

This Security shall not be valid until authenticated by the manual
signature of the Trustee or an Authenticating Agent.

19. Abbreviations

Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=Custodian), and U/G/M/A (=Uniform Gifts to
Minors Act).

28
<PAGE>

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

(Insert Assignee's Social Security or Tax-ID. No.)

(Print or type Assignee's name, address and zip code)

and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent may
substitute another to act for him.

Date: Your Signature:

(Sign exactly as your name appears on the other side of this Security)

(NG2-405.IND)

29
<PAGE>

Draft of 2/17/94

AMERICAN FINANCIAL CORPORATION

AND

STAR BANK, NATIONAL ASSOCIATION
Trustee

INDENTURE

$750,000,000
PRINCIPAL AMOUNT

9-1/2% Debentures Due April 20, 2004

Dated as of February , 1994
<PAGE>

CROSS-REFERENCE TABLE

TIA Indenture
Section Section

310(a) (1) 7.10
(a) (2) 7.10
(a) (3) N.A.
(a) (4) N.A.
(b) 7.08; 7.10; 10.02
(c) N.A.

311(a) 7.11
(b) 7.11
(c) N.A.

312(a) 2.05
(b) 10.03
(c) 10.03

313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.02
(d) 7.06

314(a) 4.02; 10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) 3.04

315(a) 7.01(b)
(b) 7.05; 10.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11

316(a) (last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
<PAGE>

CROSS-REFERENCE TABLE (continued)

317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01

N.A. = not applicable
<PAGE>

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . 1

Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . 2
Section 1.03. Incorporation by Reference of Trust Indenture Act . 2
Section 1.04. Rules of Construction . . . . . . . . . . . . . . . 3

ARTICLE 2 THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . 3

Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . 3
Section 2.02. Execution and Authentication . . . . . . . . . . . 4
Section 2.03. Registrar and Paying Agent . . . . . . . . . . . . 4
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . 4
Section 2.05. Securityholder Lists . . . . . . . . . . . . . . . 5
Section 2.06. Transfer and Exchange . . . . . . . . . . . . . . . 5
Section 2.07. Replacement Securities . . . . . . . . . . . . . . 5
Section 2.08. Outstanding Securities . . . . . . . . . . . . . . 5
Section 2.09. Cancellation . . . . . . . . . . . . . . . . . . . 6
Section 2.10. Temporary Securities . . . . . . . . . . . . . . . 6
Section 2.11. Defaulted Interest . . . . . . . . . . . . . . . . 6

ARTICLE 3 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Section 3.01. Payment of Principal and Interest on Securities . . 6
Section 3.02. Maintenance of Property . . . . . . . . . . . . . . 6
Section 3.03. Insurance . . . . . . . . . . . . . . . . . . . . . 7
Section 3.04. Compliance Certificate . . . . . . . . . . . . . . 7
Section 3.O5. SEC Reports . . . . . . . . . . . . . . . . . . . . 7
Section 3.06. No Lien Created . . . . . . . . . . . . . . . . . . 7
Section 3.07. Corporate Existence . . . . . . . . . . . . . . . . 8

ARTICLE 4 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . 8

Section 4.01. Optional Redemption . . . . . . . . . . . . . . . . 8
Section 4.02. Selection of Securities to be Redeemed . . . . . . 8
Section 4.03. Notice of Redemption . . . . . . . . . . . . . . . 8
Section 4.04. Deposit of Redemption Price . . . . . . . . . . . . 9
Section 4.05. Effect of Notice of Redemption . . . . . . . . . . 9
Section 4.06. Securities Redeemed in Part . . . . . . . . . . . . 9

ARTICLE 5 SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . 9
<PAGE>

ARTICLE 6 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . 9

Section 6.01. Events of Default . . . . . . . . . . . . . . . . . 9
Section 6.02. Acceleration . . . . . . . . . . . . . . . . . . . 10
Section 6.03. Other Remedies . . . . . . . . . . . . . . . . . . 11
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . 11
Section 6.05. Control by Majority . . . . . . . . . . . . . . . . 11
Section 6.06. Limitation on Suits . . . . . . . . . . . . . . . . 11
Section 6.07. Rights of Holders to Receive Payment . . . . . . . 12
Section 6.08. Collection Suit by Trustee . . . . . . . . . . . . 12
Section 6.09. Trustee May File Proofs of Claim . . . . . . . . . 12
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . 12
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . 12
Section 6.12. Rights and Remedies Cumulative . . . . . . . . . . 13
Section 6.13. Delay or Omission Not Waiver . . . . . . . . . . . 13

ARTICLE 7 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Section 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . 13
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . 14
Section 7.03. Trustee's Disclaimer . . . . . . . . . . . . . . . 14
Section 7.04. Individual Rights of Trustee. etc. . . . . . . . . 14
Section 7.05. Notice of Defaults . . . . . . . . . . . . . . . . 14
Section 7.06. Reports by Trustee to Holders . . . . . . . . . . . 15
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . 15
Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . 15
Section 7.09. Successor Trustee by Merger, etc. . . . . . . . . . 16
Section 7.10. Eligibility; Disqualifications . . . . . . . . . . 16
Section 7.11. Preferential Collection of Claims Against
Corporation . . . . . . . . . . . . . . . . . . . 16

ARTICLE 8 DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . 17

Section 8.01. Termination of Corporation's Obligations . . . . . 17
Section 8.02. Application of Trust Money . . . . . . . . . . . . 17
Section 8.03. Repayment to Corporation . . . . . . . . . . . . . 18
Section 8.04. Reinstatement . . . . . . . . . . . . . . . . . . . 18

ARTICLE 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . 18

Section 9.01. Without Consent of Holders . . . . . . . . . . . . 18
Section 9.02. With Consent of Holders . . . . . . . . . . . . . . 18
Section 9.03. Compliance With Trust Indenture Act . . . . . . . . 19
Section 9.04. Revocation and Effect of Consents . . . . . . . . . 19
Section 9.05. Notation on or Exchange of Securities . . . . . . . 19
Section 9.06. Trustee to Sign Amendments. etc. . . . . . . . . . 19
<PAGE>

ARTICLE 10 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 20

Section 10.01. Trust Indenture Act Controls . . . . . . . . . . . 20
Section 10.02. Notices . . . . . . . . . . . . . . . . . . . . . 20
Section 10.03. Communication by Holders With Other Holders . . . 20
Section 10.04. Certificate and Opinion of Counsel as to Condi-
tions Precedent . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.05. Statements Required in Certificate or Opinion of
Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 10.06. When Treasury Securities Disregarded . . . . . . . 21
Section 10.07. Rules by Trustee, Paying Agent, Registrar . . . . 21
Section 10.08. Legal Holidays . . . . . . . . . . . . . . . . . . 22
Section 10.09. Governing Law . . . . . . . . . . . . . . . . . . 22
Section 10.10. No Adverse Interpretation of Other Agreements . . 22
Section 10.11. No Recourse Against Others . . . . . . . . . . . . 22
Section 10.12. Successors . . . . . . . . . . . . . . . . . . . . 22
Section 10.13. Duplicate Originals . . . . . . . . . . . . . . . 22

EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

iii

OFFERING CIRCULAR

AMERICAN FINANCIAL CORPORATION
OFFER TO EXCHANGE

9-1/2% Debentures due April 20, 2004
For
Its Publicly Traded Debentures Listed Below

American Financial Corporation ("AFC") hereby offers to issue, upon
the terms and conditions set forth in this Offering Circular, $1,000
principal amount of its 9-1/2% Debentures due April 20, 2004 (the "New
Debentures") and cash representing a premium and accrued interest as set
forth below in exchange for each $1,000 principal amount of the following
debentures (collectively, the "Old Debentures").

IF YOU TENDER:
YOU WILL RECEIVE:
$1,000 Principal Amount of any of New
Accrued
the following Old Debentures: Debentures Plus
Premium Plus Interest

<S> <C> <C> <C>
9-1/2% Subordinated Debentures due April 22, 1999 $1,000 $20.00
Cash $ -0-
10% Debentures due October 20, 1999 $1,000 $20.00 Cash $ -0-
10% Debentures due October 20, 1999, Series A $1,000 $20.00 Cash $ -0-
12% Debentures due September 3, 1999 $1,000 $20.00 Cash $15.65
Cash
12% Debentures due September 3, 1999, Series A $1,000 $20.00 Cash $15.65
Cash
12% Debentures due September 3, 1999, Series B $1,000 $20.00 Cash $15.65
Cash
12-1/4% Debentures due September 15, 2003 $1,000 $57.50 Cash $11.98
Cash
13-1/2% Debentures due September 14, 2004 $1,000 $20.00 Cash $13.57
Cash
13-1/2% Debentures due September 14, 2004, Series A $1,000 $20.00
Cash $13.57 Cash

</TABLE>
<PAGE>

The above consideration is based on redemption prices plus accrued interest
plus 2% ($20 cash per $1,000 principal amount) of Old Debentures. The 12-
1/4% Debentures due 2003 are redeemable at 103.75% of principal amount.

Interest on the New Debentures accrues from April 20, 1994 and will be
paid on April 20 and October 20 of each year. All regular semi-annual
interest payments due in March and April 1994 will be paid on the Old
Debentures, including those tendered and accepted for exchange. Other than
those payments and the cash payment for "accrued interest" included in the
Exchange Offer, no further interest will be paid on Old Debentures
tendered. New Debentures will be redeemable at AFC's option, at any time
after April 20, 1999, at prices declining each April 20 from 104.75% of
principal amount in 1999 to 100% in 2002 and thereafter. See "Comparison
of Securities" for the optional and mandatory redemption features of the
Old Debentures.

Following the Expiration Date, AFC will redeem as many of the Old
Debentures outstanding as it believes its resources will reasonably allow.
All of the other issues of Old Debentures are redeemable at principal
amount. Particular issues and amounts of Old Debentures selected for
redemption will depend, among other factors, on the results of this
Exchange Offer as well as on the interest rates, sinking fund requirements,
final maturity and redemption premiums, if any, of the Old Debentures.

AFC will accept all Old Debentures validly tendered. New Debentures
will be issued in $1,000 denominations and multiples thereof. Cash at the
rate of 100% of principal amount will be paid in lieu of issuing fractional
New Debentures. Under the terms of this Exchange Offer, approximately $550
million of the New Debentures could be issued.

AFC intends to apply for listing of the New Debentures on the Pacific
and Cincinnati Stock Exchanges. On February 18, 1994, the closing prices
on the Pacific Stock Exchange per $1,000 principal amount of the Old
Debentures were: 10% Debentures - $1,002.50; 10% Series A Debentures -
$1,020.00; 12% Debentures - $1,021.25; 12% Series A Debentures - $1,020.00;
12-1/4% Debentures - $1,040.00; and 13-1/2% Debentures - $1,030.00.
Closing prices were unavailable or not meaningful for the 9-1/2%
Subordinated Debentures, 12% Series B Debentures and 13-1/2% Series A
Debentures.

The Exchange Offer is being made by AFC directly. No commissions or
fees will be paid for soliciting or securing acceptances of this Exchange
Offer.

THIS OFFER WILL EXPIRE ON MARCH 25, 1994 AT 5:00 P.M. EASTERN TIME,
UNLESS EXTENDED BY AFC WITH RESPECT TO ANY ISSUE OF OLD DEBENTURES.
____________________

The date of this Offering Circular is February 22, 1994.
<PAGE>
<PAGE>

TABLE OF CONTENTS

Page

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 1

THE EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . 2

COMPARISON OF SECURITIES . . . . . . . . . . . . . . . . . . 6

PRICE RANGE OF OLD DEBENTURES . . . . . . . . . . . . . . . . 7

PURPOSES AND EFFECTS OF THE EXCHANGE OFFER . . . . . . . . . 9

CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . 13

CERTAIN FEDERAL INCOME TAX CONSEQUENCES . . . . . . . . . . . 13

DESCRIPTION OF NEW DEBENTURES . . . . . . . . . . . . . . . . 16

DESCRIPTION OF OLD DEBENTURES . . . . . . . . . . . . . . . . 19

Description of 9-1/2% Subordinated Debentures . . . . . 20
Description of 10% Debentures . . . . . . . . . . . . . 22
Description of 10% Debentures, Series A . . . . . . . . 25
Description of 12% Debentures . . . . . . . . . . . . . 25
Description of 12% Debentures, Series A . . . . . . . . 28
Description of 12% Debentures, Series B . . . . . . . . 28
Description of 12-1/4% Debentures . . . . . . . . . . . 29
Description of 13-1/2% Debentures . . . . . . . . . . . 32
Description of 13-1/2% Debentures, Series A . . . . . . 34

____________________________

No person is authorized to give any information or to make
any representations other than contained herein and any such
additional information or representations must not be relied upon
as having been authorized. This Offering Circular does not
constitute an offer in any state in which such offer is not
authorized or to any person to whom it is unlawful to make such
offer. Neither the delivery of this Offering Circular nor any
issuance of securities hereunder shall, under any circumstances,
create any implication that there has been no change in the
affairs of AFC since the date hereof.

____________________________

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS, THE
EXCHANGE OFFER AND THE NEW DEBENTURES OFFERED HEREBY HAVE NOT
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES AUTHORITIES.
<PAGE>

____________________________

AFC's Annual Report on Form 10-K for the year ended December
31, 1992 and Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1993, June 30, 1993 and September 30, 1993 which
have been filed with the Securities and Exchange Commission and
all other filings made with the Commission by AFC under the
Securities Exchange Act of 1934 during the pendency of the
Exchange Offer are incorporated herein by reference. Copies of
these reports will be furnished on request made to the Treasurer,
American Financial Corporation, One East Fourth Street,
Cincinnati, Ohio 45202.

Questions, requests for assistance or additional copies of
this Offering Circular and the accompanying Letter of Transmittal
should be directed to Securities Transfer Company at One East
Fourth Street, Cincinnati, Ohio, 45202, (513) 579-2414 or (800)
368-3417.

INTRODUCTION

American Financial Corporation ("AFC") is a holding company
operating through wholly-owned and majority-owned subsidiaries
and other companies in which it holds significant minority
ownership interests. These companies operate in a variety of
financial businesses, including property and casualty insurance,
annuities, and portfolio investing. In nonfinancial areas, these
companies have substantial operations in the food products
industry, television and radio broadcasting and industrial
manufacturing. AFC was incorporated as an Ohio corporation in
1955. Its address is One East Fourth Street, Cincinnati, Ohio
45202 and its phone number is (513) 579-2121.

Over the years, AFC has made exchange offers in which cash,
debentures and preferred stock have been issued in exchange for
various other issues of AFC securities. AFC may in the future
make optional redemptions or make exchange or tender offers
designed to extend maturities, reduce effective costs, or reduce
amounts of debt or preferred stock outstanding.

AFC is making no recommendations as to whether or not
holders of Old Debentures should accept the Exchange Offer. AFC
has not received or asked for any opinion as to the fairness of
the Offer to holders of Old Debentures. Holders of the Old
Debentures should review the entire Offering Circular in
considering whether to accept this Exchange Offer. Holders
should also read the accompanying Letter of Transmittal which
forms a part of the Exchange Offer with regard to further
conditions and details of the Exchange Offer.

Recent Developments

AFC's pretax earnings from continuing operations for the
first nine months of 1993 were $177.4 million compared to $7.8
million for the same period in 1992. Major factors contributing
to the increase in earnings included $80 million of gains from
the sales of shares of Spelling Entertainment Group Inc. and The
Penn Central Corporation, and improved earnings from Penn Central
and Chiquita Brands International, Inc. While fourth quarter
results are not yet available, AFC anticipates that it will
report substantial earnings for that period.

On February 10, 1994, Penn Central announced that it is
considering a proposal from AFC that Penn Central purchase the
personal lines insurance businesses owned by AFC's wholly-owned
subsidiary, Great American Insurance Company ("GAI") for $380
million in cash. These businesses reported net earned premiums
of $342 million in 1993 and $322 million in 1992, representing
approximately 25% of the net premiums earned by all of GAI's
insurance operations for both of those years. GAI has estimated
that the statutory combined ratio for the businesses was 99.0% in
1993 and 99.1% in 1992. The purchase would include the transfer
of an investment portfolio of investment grade securities with a
market value of approximately $450 million. GAI has estimated
the net book value of the businesses that would be transferred
<PAGE>

would be approximately $200 million. The Penn Central board has
appointed a special committee of its outside directors which is
empowered to review all aspects of the proposal. Completion of a
transaction would be subject to certain conditions, including
approval by the special committee, receipt by Penn Central of a
appropriate fairness opinion from an investment banking firm and
any required regulatory approvals. This process could result in
the transaction being changed with respect to the nature of the
transaction, price and form of consideration paid. If the
proposed transaction is consummated, it is possible that AFC
could have substantially increased resources to invest or reduce
outstanding debt.

A Penn Central shareholder has filed purported derivative
action against AFC and the Penn Central board of directors in
state court in Cincinnati, Ohio. The action alleges that the
proposal from AFC, if consummated, would constitute a waste of
Penn Central's assets and seeks to enjoin the transaction or
damages if it is consummated. AFC believes that the lawsuit is
without merit.

THE EXCHANGE OFFER

Exchange Offer Terms

AFC is offering to issue:

(i) $1,000 principal amount of New Debentures plus $20.00 in
cash in exchange for each $1,000 principal amount
tendered of its 9-1/2% Subordinated Debentures due
April 22, 1999;

(ii) $1,000 principal amount of New Debentures plus $20.00 in
cash in exchange for each $1,000 principal amount
tendered of its 10% Debentures due October 20, 1999
and 10% Debentures due October 20, 1999, Series A;

(iii) $1,000 principal amount of New Debentures plus $35.65 in
cash in exchange for each $1,000 principal amount
tendered of its 12% Debentures due September 3,
1999, 12% Debentures due September 3, 1999, Series A
and 12% Debentures due September 3, 1999, Series B;

(iv) $1,000 principal amount of New Debentures plus $69.48 in
cash in exchange for each $1,000 principal amount
tendered of its 12-1/4% Debentures due September 15,
2003;

(v) $1,000 principal amount of New Debentures plus $33.57 in
cash in exchange for each $1,000 principal amount
tendered of its 13-1/2% Debentures due September 14,
2004 and 13-1/2% Debentures due September 14, 2004,
Series A.

The New Debentures will accrue interest from April 20, 1994,
with such interest payable in equal semi-annual installments on
April 20 and October 20. All regular semi-annual interest

2
<PAGE>

payments due in March and April 1994 will be paid on the Old
Debentures, including those tendered and accepted for exchange.

The New Debentures will be issued in denominations of $1,000
and multiples thereof. Cash, at the rate of 100% of principal
amount, will be paid in lieu of issuing fractional New
Debentures. AFC reserves the right to aggregate all Old
Debentures exchanged by each holder thereof for the purpose of
calculating denominations to be issued.

AFC will accept for exchange all of the Old Debentures
properly tendered prior to the Expiration Date and not withdrawn
in accordance with the procedures described under "Withdrawal
Rights." The Exchange Offer is not conditioned upon any minimum
principal amount of Old Debentures being tendered.

Expiration Date

The Exchange Offer will expire on March 25, 1994, at 5:00
p.m., Eastern Time, unless extended by AFC as to any or all of
the issues of Old Debentures (the "Expiration Date"). Notice of
any extension will be publicly announced.

Method of Tendering

Holders of Old Debentures may exchange their securities by
depositing or mailing a completed and signed Letter of Trans-
mittal together with the certificates being tendered to the
Exchange Agent so as to be received on or prior to the Expiration
Date. Facsimile copies of the Letter of Transmittal will be
accepted. The Exchange Agent for the Exchange Offer is:
Securities Transfer Company
One East Fourth Street
Cincinnati, Ohio 45202
(800) 368-3417 or (513) 579-2414
(513) 621-1583 FAX

Hand deliveries may be made to the 12th Floor at the same
address. Letters of Transmittal, certificates representing the
Old Debentures, and other required documents, if any, may also be
sent or delivered to AFC at One East Fourth Street, Cincinnati,
Ohio 45202.

Additionally, Old Debentures will be deemed to have been
offered to AFC for exchange if the Exchange Agent shall (a) have
received prior to the Expiration Date from a commercial bank or
trust company having an office, branch or agency in the United
States, or a member firm of a national securities exchange or a
member of the National Association of Securities Dealers, Inc.
("Eligible Institution"), a properly completed Letter of
Transmittal, letter, or fax giving the name of the tendering
holder, the amount of securities tendered, the names in which the
securities being tendered are registered, and stating that the
tender is being made thereby and guaranteeing delivery of the
tendered securities (in which case, subject to subsequent

3
<PAGE>

compliance with clause (b) below, the securities, to which the
Letter of Transmittal, letter, fax or telegram relates shall be
deemed properly tendered as of the date of receipt of the Letter
of Transmittal, letter, fax or telegram); and (b) thereafter in
fact have received the tendered certificates and a Letter of
Transmittal within seven days after the Expiration Date.

The method of delivery of the Letter of Transmittal,
debenture certificates and other required documents, if any, to
the Exchange Agent is at the election and risk of the
debentureholder.

No signature guarantee is required if (a) the Letter of
Transmittal is signed by the registered holder of the Old
Debentures and New Debentures are to be issued directly to such
registered holder or (b) the certificates are tendered for the
account of an Eligible Institution.

A debentureholder may tender less than the entire principal
amount of Old Debentures represented by the certificates covered
by a Letter of Transmittal by appropriately marking such Letter
of Transmittal, in which case a certificate representing the
principal amount of Old Debentures not tendered will be returned
to the tendering debentureholder.

All questions as to the validity, form, eligibility (includ-
ing time of receipt) and acceptance of any Old Debenture tendered
will be determined by AFC, which determination shall be final and
binding. AFC reserves the absolute right to reject any and all
tenders of Old Debentures not in proper form or the acceptance of
which would, in the opinion of AFC's counsel, be unlawful, or to
waive any defect or irregularity in the tender of the Old
Debentures. AFC's interpretation of the terms and conditions of
the Exchange Offer (including the Letter of Transmittal and the
Instructions thereto) will be final. Neither AFC nor the
Exchange Agent shall be under any duty to give notification of
any defects or irregularities in tenders or shall incur any
liability for failure to give such information.

Withdrawal Rights

Persons tendering their Old Debentures in response to the
Exchange Offer may withdraw the securities so tendered at any
time prior to the close of business on March 25, 1994, or may
withdraw such securities after April 20, 1994, unless accepted by
AFC prior to the latter date, so long as AFC or the Exchange
Agent receives notice of withdrawal before such acceptance. Any
notice of withdrawal must specify the name of the person having
deposited the debenture certificate to be withdrawn, the
principal amount to be withdrawn and the name of the registered
holder and certificate numbers of any Old Debentures to be
withdrawn. All questions as to the validity of withdrawals,
including the time of receipt of notices of withdrawal, will be
determined by AFC.

4
<PAGE>

Acceptance of Tendered Old Debentures; Delivery of New Debentures

Acceptance of tendered Old Debentures will occur upon AFC
giving oral or written notice thereof to the Exchange Agent.
Payments will be made to tendering debentureholders as soon as
practicable after their Old Debentures are accepted.
Certificates representing any principal amount of Old Debentures
not exchanged for New Debentures will be returned as soon as
practicable after the Expiration Date.

Conditions of Exchange Offer; Amendments

Notwithstanding any other provisions of the Exchange Offer,
or any extension of the Exchange Offer, AFC shall not be required
to issue New Debentures in respect of any tendered Old Debentures
and may terminate or amend the Exchange Offer (by oral or written
notice to the Exchange Agent) if any of the following occur:

(a) there shall be instituted or threatened any action
or proceeding before or by any court or governmental agency,
or by any person, challenging the Exchange Offer or
otherwise directly or indirectly relating to the Exchange
Offer or seeking damages or other relief or order which, in
the opinion of AFC, would adversely affect its business or
the business of its subsidiaries or the Exchange Offer; or

(b) the indenture pursuant to which the New Debentures
are to be issued has not been qualified under the Trust
Indenture Act of 1939 prior to the expiration of the
Exchange Offer.

The foregoing conditions are for the sole benefit of AFC and
may be waived by AFC, in whole or in part, in its sole
discretion. Any determination made by AFC concerning the events
described immediately above will be final and binding on all
parties.

AFC expressly reserves the right to amend the terms of the
Exchange Offer in any manner, including changing the terms or
expiration date with respect to some of the issues of Old
Debentures and not others, so long as such change is not
disadvantageous to tendering debentureholders. Any such
amendment will be followed as promptly as practicable by public
announcement thereof.

Market for New Debentures

There are no New Debentures presently outstanding. AFC
intends to apply for listing of the New Debentures on the Pacific
and Cincinnati Stock Exchanges. Whether or not such listings are
obtained, AFC expects that the New Debentures will trade in the
over-the-counter market. Market values of New Debentures may be
expected to fluctuate depending on conditions prevailing from
time to time in the bond markets and the financial condition of
AFC.
<PAGE>

5
<PAGE>

<TABLE>
COMPARISON OF SECURITIES

The following information sets forth the principal differences between
the New Debentures and the Old Debentures. Each issue of Old Debentures is
currently listed on the Pacific and Cincinnati Stock Exchanges and securities
dealers may extend margin credit on them. AFC intends to apply for listing of
the New Debentures on these Exchanges; such listing may make the New
Debentures eligible for the extension of margin credit by securities dealers.
For a more complete description of the New Debentures and the Old Debentures,
see "Description of New Debentures" and "Description of Old Debentures."
<CAPTION>

SECURITY AMOUNT INTEREST PAYMENTS MANDATORY OPTIONAL
OUTSTANDING REDEMPTION REDEMPTION
<S> <S> <S> <S> <S>

NEW DEBENTURES New issue. None 9-1/2% interest - T h e N e w T h e N e w
outstanding. A ($95.00 per Debentures mature Debentures will
maximum of $750 $1,000 principal on April 20, be redeemable at
million principal amount) payable 2004. AFC's option
a m o u n t i s semi-annually on beginning in
authorized to be April 20 and 1999 at prices
issued. October 20, declining each
commencing April 20 from
October 20, 1994. 104.75% of
principal amount
in 1999 to 100%
in 2002 and
thereafter, plus
accrued interest
to the date of
redemption.

9-1/2% SUBORDINATED Approximately 9-1/2% interest - These Debentures These Debentures
DEBENTURES $7.7 million ($95.00 per will be retired are redeemable
principal amount. $1,000 principal at face at a rate at AFC's option
amount) payable of 5% of original at any time at
in semi-annual principal amount face value plus
installments on on each April 22 accrued interest
April 22 and through 1998, to the date of
October 22. with remaining redemption.
Debentures
maturing on April
22, 1999.

6
<PAGE>

10% DEBENTURES Approximately 10% interest These Debentures These Debentures
10% DEBENTURES, SERIES A $150.0 million ($100.00 per will be retired are redeemable
principal amount. $1,000 principal at face at a rate at AFC's option
amount) payable of 4% of original at any time at
in semi-annual principal amount face value, plus
installments on on each October accrued interest
April 20 and 20 through 1998, to the date of
October 20. with remaining redemption.
Debentures
maturing on
October 20, 1999.

12% DEBENTURES Approximately 12% interest These Debentures These Debentures
12% DEBENTURES, SERIES A $189.1 million ($120.00 per will be retired are redeemable
12% DEBENTURES, SERIES B principal amount. $1,000 principal at face at a rate at AFC's option
amount) payable of 2% of original at any time at
in semi-annual principal amount face value plus
installments on on each September accrued interest
March 3 and 3 through 1998, to the date of
September 3. with remaining redemption.
Debentures
maturing on
September 3,
1999.

12-1/4% DEBENTURES Approximately 12-1/4% interest These Debentures These Debentures
$128.3 million ($122.50 per will be retired are redeemable
principal amount. $1,000 principal at face at a rate at AFC's option
amount) payable of 5% of original at any time at
in semi-annual principal amount prices declining
installments on on each September from 103.75% of
March 15 and 15 in 1998 principal amount
September 15. through 2002, during 1994 to
with remaining 100% in 1997 and
Debentures thereafter, plus
maturing on accrued interest
September 15, to the date of
2003. redemption.
13-1/2% DEBENTURES Approximately 13-1/2% interest These Debentures These Debentures
13-1/2% DEBENTURES, $73.5 million ($135.00 per will be retired are redeemable
SERIES A principal amount. $1,000 principal at face at a rate at AFC's option
amount) payable of 3% of original at any time at
in semi-annual principal amount face value, plus
installments on on each September accrued interest
March 14 and 14 in 1995 to the date of
September 14. through 2003, redemption.
with remaining
Debentures
maturing on
September 14,
2004.
</TABLE>

7
<PAGE>

PRICE RANGE OF OLD DEBENTURES

The Old Debentures are listed on the Pacific and Cincinnati
Stock Exchanges. The following table shows the high and low
prices per $1,000 principal amount for the Old Debentures for the
periods indicated. The prices indicated for the Old Debentures
were obtained from the Pacific Stock Exchange. High and low
prices for the First Quarter of 1994 are through February 18.
<TABLE>
<CAPTION>
1994
1991 1992
1993 (thru 2/18)
High Low High Low High
Low High Low

<S> <C> <C> <C> <C> <C> <C> <C> <C>
10% Debentures
First Quarter . . $ 719$ 580$ 990$ 820 $ 963$ 870 $1,019 $ 990
Second Quarter . . 810 694 918 869 975 893
Third Quarter . . 780 741 894 865 1,010 965
Fourth Quarter . . 853 753 893 843 1,010 970

10% Series A Debentures
First Quarter . . $ 750$ 613$ 950$ 850$ 960$ 905 $1,020 $ 985
Second Quarter . . 820 695 911 880 970 903
Third Quarter . . 783 745 1,000 870 1,000 960
Fourth Quarter . . 815 740 945 893 990 970

12% Debentures
First Quarter . . $ 848$ 723 $1,038$ 920 $1,010$ 933 $1,029 $1,016
Second Quarter . . 940 800 1,005 970 1,013 940
Third Quarter . . 880 845 990 959 1,024 1,000
Fourth Quarter . . 945 850 968 916 1,030 998

12% Series A Debentures
First Quarter . . $ 850$ 700 $1,005$ 918 $1,010$ 940 $1,021 $1,011
Second Quarter . . 900 835 1,000 950 1,010 970
Third Quarter . . 900 848 990 960 1,040 996
Fourth Quarter . . 938 846 974 916 1,050 1,005

12-1/4% Debentures
First Quarter . . $ 820$ 665 $1,010$ 810 $1,010$ 950 $1,050 $1,036
Second Quarter . . 868 800 1,010 948 1,000 943
Third Quarter . . 940 835 978 940 1,005 968
Fourth Quarter . . 985 853 965 913 1,058 1,005

13-1/2% Debentures
First Quarter . . $ 880$ 680 $1,051$ 970 $1,050$1,010 $1,050 $1,025
Second Quarter . . 945 873 1,035 996 1,040 1,000
Third Quarter . . 1,050 850 1,060 1,003 1,078 1,028
Fourth Quarter . . 1,020 955 1,035 1,000 1,075 1,028

8
<PAGE>

Due to the limited number of holders and/or trades of the 9-1/2% Subordinated
Debentures, 12% Series B Debentures and the 13-1/2% Series A Debentures,
meaningful closing prices are not available.
</TABLE>
<PAGE>

9
<PAGE>

On February 18, 1994, the closing prices on the Pacific Stock
Exchange for $1,000 principal amount of the following issues of Old
Debentures, the number of record holders and the principal amount
outstanding were as follows:

<TABLE>
<CAPTION>
Closing Number of Principal
Amount
Price Record Holders
Outstanding

<S> <C> <C> <C>
9-1/2% Subordinated Debentures due April 22, 1999 . $ * 1,454 $
7,708,000

10% Debentures due October 20, 1999 . . . 1,002.50 4,327 145,900,000
10% Debentures due October 20, 1999, Series A . . . 1,020.00 447
4,113,000

12% Debentures due September 3, 1999 . . 1,021.25 1,629 89,658,000
12% Debentures due September 3, 1999, Series A . . 1,020.00 2,115
40,555,000
12% Debentures due September 3, 1999, Series B . . * 25
58,885,000

12-1/4% Debentures due September 15, 2003 1,040.00 2,962 128,294,000

13-1/2% Debentures due September 14, 2004 1,030.00 1,120 25,566,000
13-1/2% Debentures due September 14, 2004, Series A * 38
47,980,000

* Meaningful closing prices not available.

</TABLE>
<PAGE>

10
<PAGE>

PURPOSES AND EFFECTS OF THE EXCHANGE OFFER

AFC believes that it will benefit from this Exchange Offer
primarily in that the interest rate on the New Debentures will be
less than on the Old Debentures. Additionally, overall maturity
payment requirements will be extended. The exchange, therefore,
will strengthen AFC's capital structure and enable it to utilize
the cash savings for other corporate purposes.

AFC intends to use the Old Debentures acquired in the Exchange
Offer to satisfy remaining sinking fund requirements and reduce the
amount due at maturity. AFC reserves the right to credit the
acquired Old Debentures for later redemption requirements as
opposed to earlier requirements.

Old Debentures may be called for redemption, in whole or in
part, while the Exchange Offer is pending or after the Expiration
Date. Following the Expiration Date, AFC will redeem as many of
the Old Debentures outstanding as it believes its resources will
reasonably allow. As of February 18, 1994, AFC had available
approximately $300 million in unused lines of credit and available
cash for this purpose. Particular issues and amounts of Old
Debentures selected for redemption will depend, among other
factors, on the results of this Exchange Offer as well as on the
interest rates, sinking fund requirements, final maturity and
redemption premiums, if any, of the Old Debentures.

A reduction in the size of the float (the principal amount
publicly held by other than officers, directors and certain other
affiliates, and available for trading) effected by the Exchange
Offer may result in a decrease in trading activity and liquidity of
Old Debentures and may affect market prices. AFC does not believe
there is a reliable way of predicting how these and all other
relevant factors may affect the prices at which non-tendering
holders of Old Debentures would subsequently be able to sell their
securities.

As of January 31, 1994, AFC's officers and directors
beneficially owned approximately $20.2 million principal amount of
Old Debentures which may be exchanged for New Debentures. In
addition, certain benefit plans of AFC and its subsidiaries
beneficially own an aggregate of approximately $40.6 million
principal amount of Old Debentures. AFC has been informed that
most of such debentures will likely be tendered in the Exchange
Offer. Approximately $8.0 million principal amount of a private
issue of AFC debentures which are held by an AFC subsidiary will
also be exchanged for New Debentures.

The table below shows (in thousands) total sinking fund and
other principal payments on all debt of AFC (parent only) for 1994
and in subsequent periods on an historical basis and on a pro forma
basis (a) assuming 50% of each issue of the Old Debentures are
exchanged pursuant hereto ("50% Acceptance") and (b) assuming all
of the Old Debentures are tendered ("100% Acceptance"). The

11
<PAGE>

scheduled payments shown below assume that debentures purchased are
applied to the earliest scheduled retirements.

<TABLE>
<CAPTION> Pro Forma

December 31, 1993 50%
100%
Historical Acceptance Acceptance
<C> <C> <C> <C>

1994 . $ 12,080 $ 3,231 $ 3,231
1995 . 10,883 261 261
1996 . 11,843 261 261
1997 . 17,818 5,493 5,493
1998 . 19,223 261 261
1999-2002 343,605 184,928 11,469
2003-2006 154,279 375,296 548,755

Total $569,731 $569,731 $569,731

</TABLE>

Actual cash outlays will be less than indicated in the above
table to the extent that AFC can satisfy scheduled retirements and
sinking fund requirements by acquiring its debt at discounts from
redemption values.

The net annual charge to pretax income for interest expense
will decline by approximately $7.5 million based on 50% Acceptance
and approximately $14.9 million based on 100% Acceptance.

Source of Funds

AFC is organized as a holding company with almost all of its
operations being conducted by subsidiaries. The parent
corporation, however, has continuing expenditures for
administrative expenses and corporate services and, most
importantly, for the payment of principal and interest on
borrowings and dividends on outstanding preferred and common stock.

At January 31, 1994, the parent corporation had investments in
marketable securities which had a market value of $318 million.

Funds to meet the parent company expenditures have been
provided from a variety of sources within the holding company, from
subsidiaries and directly from outside sources, as detailed in the
following table (in millions):
<PAGE>

12
<PAGE>

<TABLE>
<CAPTION>
Cash Provided from: 1992 1991 1990
<S> <C> <C> <C>
Operations:
Tax allocation payments from $128.7 $107.6 $ 53.5
subsidiaries.....................
Dividends from 67.0 64.1 47.3
subsidiaries..............................
.........
Interest and dividends from 9.0 5.6 3.2
others...............................
Receipts on notes and lease .9 2.6 8.4
receivables.........................
Federal income tax 18.3 - 17.6
refund....................................
.....
From 223.9 179.9 130.0
operations................................
..................
Other transactions:
Sale of 139.0 - -
subsidiary................................
...................
Sale of assets to non- 25.6 8.7 4.3
affiliates................................
....
Sale of assets to 3.2 - 10.7
affiliates................................
..........
Sales of Preferred 15.0 19.4 -
Stock.....................................
......
Additional .8 .9 1.1
borrowings................................
..............
6.8 13.2 12.2
Other.....................................
..............................
Total cash 414.3 222.1 158.3
provided..................................
............

Cash utilized for:
Operations:
Interest 67.7 67.8 68.9
payments..................................
.................
Dividend 29.0 32.2 36.4
payments..................................
...............

13
<PAGE>

Federal income tax 22.2 17.5 -
payments..................................
..
Other holding company 36.8 42.6 39.7
costs....................................
For 155.7 160.1 145.0
operations................................
...................
Other transactions:
Net advances to (from) 225.5 14.8 (82.6)
subsidiaries.............................
Purchases of affiliate securities and
other 42.7 1.8 58.7

investments...............................
.........................
Principal payments on 17.5 5.5 7.8
debt......................................
..
Repurchases of Preferred 10.5 6.8 7.4
Stock..................................
.6 .6 9.6
Other.....................................
..............................
Total cash 452.5 189.6 145.9
utilized..................................
..............

Net increase (decrease) in cash and short- (38.2) 32.5 12.4
term investments
Cash and short-term investments at 47.0 14.5 2.1
beginning of period....
Cash and short-term investments at end $ 8.8 $ 47.0 $ 14.5
of period............
</TABLE>

AFC has revolving credit agreements with several banks under which
it may borrow up to $300 million until December 31, 1996. Any
amount outstanding at that date is to be repaid in installments
over the following four years. Proceeds may be used for expansion,
operating capital, debt repayments or other purposes. Borrowings
under AFC's revolving credit lines are made by a wholly-owned
subsidiary, Great American Holding Corporation ("GAHC") and are
advanced to AFC. These lines are guaranteed by AFC and are secured
by 50% of the stock of its largest insurance subsidiary, Great
American Insurance Company. Such borrowings are included in
"advances from subsidiaries" in the above table. Repayments under
the revolving credit lines are likewise included in "advances to
subsidiaries". At February 18, 1994, AFC had no borrowings
outstanding under these agreements. Interest payments on these
lines amounted to $12.0 million in 1992, $17.5 million in 1991 and
$18.3 million in 1990 and are included in "advances to
subsidiaries".

14
<PAGE>

AFC and certain subsidiaries have agreements among themselves
under which they may borrow from each other from time to time for
short-term working capital needs. These loans are made at current
market rates.

Management believes AFC has sufficient resources to meet its
liquidity requirements through operations in the short-term and
long-term future. If funds generated from operations, including
dividends from subsidiaries, are insufficient to meet fixed charges
in any period, AFC would be required to meet such charges through
bank borrowings, sales of securities or other assets, or similar
transactions.

Over 90% of dividends (including non-cash dividends) actually
received from subsidiaries in 1993, 1992 and 1991 were from AFC's
insurance subsidiaries. Payments of dividends by AFC's insurance
subsidiaries are subject to various laws and regulations which
limit the amount of dividends that can be paid without regulatory
approval.
Under tax allocation agreements with AFC, each 80%-owned U.S.
subsidiary computes its tax provision as if filing a separate
return based on its book taxable income computed in accordance with
generally accepted accounting principles. The resulting provision
(or credit) is currently payable to (or receivable from) AFC.

<PAGE>

15
<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of AFC
(parent only) at December 31, 1993, except as noted, and as
adjusted for 50% Acceptance and 100% Acceptance (dollars in
millions):

<TABLE>
<CAPTION> As Adjusted For

50% 100%
Historical Acceptance Acceptance

<S>
<C> . . . . . . . . . . . . . . . . . <C> <C>
Long-term debt:
New Debentures offered hereby $ -- $ 274 $ 549
Other long-term debt of parent 549 286 23
Total long-term debt . . . 549 560 572

Mandatory redeemable preferred stock
at redemption value . . . . . . . . 9 9 9
Capital Subject to Put Option (September 30, 1993) 30 30
. . . . . . . . . . . . . . . . . . . 30
Total redeemable capital . 39 39 39

Permanent shareholders' equity (September 30, 1993):
Other preferred stock (redemption value - $279) 169 169
169
Common stock, without par value 1 1 1
Retained earnings . . . . . . . 191 191 191
Net unrealized gain on marketable
securities, net of deferred income taxes . . . . 166 166
. . . . . . . . . . . . . . . . . . . 166
Total permanent shareholders' equity 527 527 527

Total capitalization . . . . . . . . $1,115 $1,126 $1,138

</TABLE>

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a general discussion of the principal federal
income tax consequences of the Exchange Offer that may be expected
to result to AFC and to the exchanging debentureholders. This
discussion is based on the Internal Revenue Code of 1986, as
amended (the "Code"), the income tax regulations promulgated by the
Treasury Department, administrative rulings and pronouncements of
the Internal Revenue Service (the "Service"), and judicial
decisions, all as of the date of this Offering Circular. All of
the foregoing are subject to change and any such change may be
applied retroactively. In particular, holders of securities should

16
<PAGE>

be aware that certain relevant amendments to the Code have been
subject to only preliminary interpretations by the Service, and to
no interpretation by the courts. This discussion assumes that the
Old Debentures surrendered in the exchange are a capital asset in
the hands of the exchanging debentureholders. This discussion does
not purport to address all of the federal income tax consequences
that may be applicable to particular categories of
debentureholders, including but not limited to (i) those that
received their debentures as employees, (ii) AFC's employee benefit
plans, (iii) dealers in securities, (iv) banks, (v) insurance
companies, (vi) tax-exempt persons, and (vii) non-United States
persons. This discussion also does not address any tax
consequences under the laws of any state, locality, or foreign
jurisdiction. AFC does not intend to seek a ruling from the
Service with respect to the federal income tax consequences of the
Exchange Offer, and it is possible that the Service may take
positions contrary to those set forth herein and such contrary
positions may prevail in the event of a court challenge.
DEBENTUREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO ANY
FEDERAL, STATE, LOCAL, FOREIGN OR OTHER TAX CONSIDERATIONS RELEVANT
TO THEM.

Certain Federal Income Tax Consequences to AFC

AFC should recognize no gain or loss for federal income tax
purposes on the exchange of its Old Debentures for its New
Debentures. AFC should be entitled to a deduction, in the taxable
year of the exchange, in an amount equal to any excess of the issue
price (as determined under section 1273(b)(3) of the Code) of the
New Debentures (plus any cash paid by AFC for the Old Debentures)
over the adjusted issue price of the Old Debentures surrendered in
exchange therefor. The adjusted issue price of an Old Debenture is
the issue price of such Old Debenture as increased by the accrued
original issue discount thereon. To the extent that original issue
discount accrues on the New Debentures in any taxable year, AFC
intends to deduct such accrued amounts in such taxable year as
interest expense. However, AFC does not anticipate that the New
Debentures will have original issue discount.

Certain Federal Income Tax Consequences to Exchanging
Debentureholders

Tax Consequences of the Exchange

Because the exchange of Old Debentures for New Debentures
should qualify as a "recapitalization" under section 368(a)(1)(E)
of the Code, gain or loss should not be recognized by the
exchanging debentureholders except as stated herein. Subject to
the rules set forth below relating to accrued original issue
discount, an exchanging debentureholder's gain (but not loss) on
the exchange will be recognized (and therefore will be reportable
as income) to the extent of any cash premium or other property
(including an excess principal amount, as described below) received
from AFC in addition to New Debentures (the "gain recognition
rule"). For purposes of the preceding sentence, "gain" is the

17
<PAGE>

excess, if any, of (i) cash premium and the issue price of the New
Debentures received over (ii) the exchanging debentureholder's tax
basis in the Old Debentures surrendered therefor. If the holder of
any Old Debenture has accrued market discount on such debenture
within the meanings of sections 1276(b) and 1278(a) of the Code,
recognized gain on the exchange of that debenture will be treated
as ordinary income (rather than capital gain) to the extent of such
accrued market discount. Accrued market discount on the Old
Debentures should not increase the amount of gain otherwise
recognized by the exchanging debentureholders; rather, the ordinary
income taint of accrued market discount in excess of gain otherwise
recognized should carry over to the New Debentures received in the
exchange. However, because the Code states that the rules
described in the preceding sentence are to be set forth in
regulations that have not yet been issued, the current application
of such rules is not free from doubt.

For purposes of the gain recognition rule, "other property"
includes the fair market value of the excess, if any, of the
principal amount of securities received in the exchange over the
principal amount of securities surrendered therefor. Because the
face amount of New Debentures received in the exchange will not
exceed the face amount of the Old Debentures surrendered therefor,
exchanging debentureholders should not recognize gain under this
excess principal amount rule if the statutory phrase "principal
amount" is synonymous with "face amount." However, the Service has
indicated in at least one private letter ruling (which does not
have precedential value) that the phrase "principal amount" means
the face amount of a debenture as reduced by the unamortized
original issue discount on that debenture. If the Service were to
take this position and prevail, a debentureholder's gain on the
exchange generally would be recognized in an amount equal to the
sum of (i) cash premium received and (ii) the fair market value of
the excess, if any, of the principal amount (less any unamortized
original issue discount thereon) of the New Debentures received
over the principal amount (less any unamoritized original issue
discount thereon) of the Old Debentures surrendered by that
debentureholder. Debentureholders should consult with their own
tax advisers on the issue of whether "principal amount" is
synonymous with "face amount" for this purpose.

Subject to the rules set forth below relating to accrued
original issue discount, an exchanging debentureholder's tax basis
in New Debentures received in the exchange is an amount equal to
such debentureholder's tax basis in the Old Debentures surrendered
therefor, decreased by any cash premium and the fair market value
of other property received, and increased by any gain recognized by
such debentureholder on the exchange (the "general tax basis
rule"). The exchanging debentureholder is entitled to a fair
market value tax basis in any such other property received.

Special rules apply with respect to accrued original issue
discount on the Old Debentures. First, an exchanging
debentureholder will recognize ordinary income to the extent that
New Debentures and cash received in the exchange are attributable

18
<PAGE>

to original issue discount that accrued during the exchanging
debentureholder's holding period and that was not previously
included in such debentureholder's taxable income. Second, the
exchanging debentureholder is entitled to a fair market value tax
basis in a New Debenture received in the exchange to the extent
that such New Debenture is attributable to accrued original issue
discount that is or has been included in such debentureholder's
taxable income. Third, the gain recognition rule and the general
tax basis rule as described above are to be applied without regard
to any amounts received that are attributable to accrued original
issue discount, and without regard to any tax basis attributable to
such accrued original issue discount.

Original Issue Discount

A New Debenture received in the exchange will have original
issue discount if and to the extent that the stated redemption
price at maturity (as defined in section 1273(a)(2) of the Code) of
the New Debenture exceeds the issue price of such New Debentures
(as determined under section 1273(b)(3) of the Code). Such
original issue discount is includible in the holder's income (as
interest income) on an economic accrual basis over the term of the
debenture. The original issue discount on a New Debenture will be
deemed to be zero if such discount does not exceed the product of
(i) .25 percent of the stated redemption price at maturity of such
New Debenture, multiplied by (ii) the number of complete years to
maturity of such New Debenture. As stated above, AFC does not
anticipate that the New Debentures will have original issue
discount. Any unamortized original issue discount on Old
Debentures that are surrendered in the exchange should be
extinguished.

Federal Income Tax Withholding

In order to avoid federal income tax withholding on payments
made on the New Debentures, holders must furnish the information
required by Form W-9 or W-8, or similar form. In general, federal
income tax will be withheld (at 31%, currently) unless the
debentureholder (i) is a corporation or comes within certain other
exempt categories or (ii) provides a taxpayer identification number
and certifies that he has not been notified by Internal Revenue
Service that he is subject to such withholding.

DESCRIPTION OF NEW DEBENTURES

General

The New Debentures will be unsecured obligations of AFC and
issued under an Indenture between AFC and Star Bank, National
Association as Trustee. The following statements are brief
summaries of certain provisions of the Indenture and do not purport
to be complete. The Indenture has been filed with the Securities
and Exchange Commission and references to the Indenture are
qualified in their entirety by express reference to the Indenture.

19
<PAGE>

The Indenture provides for the issuance of up to $750 million
principal amount of New Debentures of which up to approximately
$550 million could be issued pursuant to the Exchange Offer.
Additional New Debentures may be issued in future exchange offers
or in other transactions. The New Debentures are issuable as
registered debentures without coupons in denominations of $1,000
and any multiple thereof. The New Debentures are exchangeable and
transferable at the office of the transfer agent which the Company
has designated as Securities Transfer Company, One East Fourth
Street, Cincinnati, Ohio 45202. No service charge will be made
for the transfer or exchange of New Debentures, but AFC may require
payment of sums sufficient to cover any tax or other governmental
charge. (Sections 2.03 and 2.06 of the Indenture; further
references to Sections are references to the Indenture.)

Principal, Maturity and Interest

The New Debentures bear interest at the rate of 9-1/2% per
annum which is payable semi-annually on April 20 and October 20
each year to holders of record on the April 1 and October 1 next
preceding the interest payment date. Interest on the New
Debentures will accrue from April 20, 1994. They will mature on
April 20, 2004. Payments of principal and premium, if any, and
interest payable on redemption (other than interest payable on
April 20 and October 20 will be made at the office of the Paying
Agent in Cincinnati, Ohio, upon surrender of the New Debentures.
(Section 3.01)

Optional Redemption

The New Debentures will be redeemable after April 20, 1999 at
the option of AFC, as a whole or in part, on not less than 30 nor
more than 60 days' written notice, at the following prices,
expressed in percentage of the principal amount, together with
interest accrued to the date fixed for redemption. If redeemed on
or after April 20 of:
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
<C> <C> <C> <C>
1999 . . . . 104.75% 2001 101.75%
2000 . . . . 103.25% 2002 and
thereafter . . . . . . . 100.00%

</TABLE>

Redemptions will be made in $1,000 denominations with the
Trustee determining the particular New Debentures to be redeemed by
lot at its discretion. (Sections 4.01, 4.02 and 4.03)

No Sinking Fund

The Indenture contains no sinking fund provisions.

20
<PAGE>

No Financial Covenants

The Indenture contains no provisions which restrict the
issuance of additional securities, the incurring of additional
debt, the declaration of dividends or the retirement of equity
securities. The Indenture does not require the maintenance of any
particular ratios or the creation or maintenance of reserves, nor
does it contain any other financial covenants.

Modification and Satisfaction of Indentures

The Indenture may be amended or supplemented by AFC and the
Trustee with the consent of the holders of not less than a majority
in principal amount of the New Debentures then outstanding; but no
modification of the terms of payment of principal or interest on
the New Debentures and no modification impairing or reducing the
percentage required for modification will be effective against any
holder without his consent. (Section 9.02)

The Indenture may be satisfied and discharged upon cancel-
lation of all the New Debentures or, under certain conditions, upon
deposit with the Trustee of funds or securities sufficient
therefor. (Section 8.01)

Limitations on Claims in Bankruptcy or on Acceleration Upon an
Event of Default

Under the Indenture, the Trustee or the holders of 25% of the
New Debentures may declare an acceleration if an Event of Default
occurs and is continuing, even if the bankruptcy of AFC does not
result in or was not the cause of the Event of Default. Under the
terms of the Indenture, should an acceleration be declared as a
result of the occurrence and continuation of an Event of Default
absent bankruptcy, the claim of a holder of New Debentures is for
the full principal amount of the holder's New Debentures. (Section
6.02)

The amount that a holder would be able to recover from AFC,
under a bankruptcy or an event of default, may, however, be limited
by applicable law to the issue price (the market value at the time
of issuance) of the New Debentures plus the portion of any original
issue discount which has been amortized.

Events of Default

21
<PAGE>

cured within 30 days after notice of such default; or failure to
pay any funded debt in excess of $10,000,000 now existing or
existing after the date of the Indenture within 20 days after
stated maturity. Upon the happening and during the continuance of
any Event of Default, the Trustee or the holders of at least 25% in
principal amount of the outstanding New Debentures may declare the
principal and accrued interest of all New Debentures due and
payable. The Indenture provides that such declaration and its
consequences may, in certain events, be annulled by the holders of
a majority in principal amount of the outstanding New Debentures.
(Article 6)

The Indenture provides that if a default occurs and is
continuing and is actually known to the Trustee, the Trustee shall,
within 90 days thereafter, give to the holders notice of all
uncured defaults known to it (the term default to include the
events specified above without grace periods); provided that,
except in the case of default in payment of principal of or
interest in respect of the New Debentures, the Trustee shall be
protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interest of the
holders. (Section 7.05)

AFC must furnish to the Trustee within 120 days after the end
of each fiscal year, a certificate of certain officers of AFC as to
whether such persons have knowledge of any default under the
Indenture. (Section 3.04)

The holders of a majority in aggregate principal amount of
outstanding New Debentures will 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, except that the Trustee shall not be so
required to act unless reasonable indemnity shall be offered
against the costs, expenses and liabilities of such act, or except
as otherwise provided in the Indenture. (Sections 6.05 and 7.01)

Trustee

The Trustee serves as trustee under indentures relating to
other debt of AFC and certain of its subsidiaries and affiliates
and has loans outstanding to certain subsidiaries and affiliates of
AFC. The Trustee has no other material relationship with AFC.

Authenticating Agent, Paying Agent, Registrar

Securities Transfer Company, an Ohio limited partnership,
Cincinnati, Ohio, has been designated by AFC as the Authenticating
Agent, Paying Agent, and Registrar for the New Debentures. AFC may
change the Authenticating Agent, Paying Agent and Registrar without
prior notice. AFC is the general partner of Securities Transfer
Company and subsidiaries and affiliates of AFC are limited
partners. AFC or any of its subsidiaries or affiliates may act in
such capacities.

22
<PAGE>

DESCRIPTION OF OLD DEBENTURES

Introduction

The following statements are brief summaries of certain
provisions of the indentures governing the various issues of Old
Debentures and do not purport to be complete. The indentures are
on file with the Securities and Exchange Commission and
references to the indentures are qualified in their entirety by
express reference to such indentures. Parenthetical references
are to provisions of the particular indenture.

Star Bank, National Association (the "Trustee") serves as
trustee under the indentures relating to the Old Debentures and
other debt of AFC and certain of its subsidiaries and affiliates.
The Trustee also has loans outstanding to certain subsidiaries
and affiliates of AFC. The Trustee has no other material
relationship with AFC.

Securities Transfer Company, Cincinnati, Ohio, has been
designated by AFC as the Paying Agent and Registrar for all
issues of Old Debentures. AFC may change the Paying Agent and
Registrar without notice. AFC or any of its subsidiaries or
affiliates may act in such capacities.

DESCRIPTION OF 9-1/2% SUBORDINATED DEBENTURES

General

The 9-1/2% Subordinated Debentures due April 22, 1999 (the
"9-1/2% Debentures") are unsecured obligations of AFC and were
issued under an Indenture which provides for the issuance of up
to $16,459,000 principal amount of which approximately $7.8
million were outstanding on December 31, 1993. The 9-1/2%
Debentures were issuable as registered debentures without coupons
in denominations of $10 and any multiple thereof. The 9-1/2%
Debentures are exchangeable and transferable at the office of the
Trustee. No service charge is made for the transfer or exchange
of 9-1/2% Debentures, but AFC may require payment of sums
sufficient to cover any tax or other governmental charge.
(Sections 2.01, 2.03, 2.05 and 5.03 of the Indenture).

Payment of Principal and Interest

The 9-1/2% Debentures bear interest at the rate of 9-1/2%
per annum which is payable semi-annually on April 22 and October
22 each year to holders of record on the April 1 and October 1
next preceding the interest payment date. They will mature on
April 22, 1999. Payments of principal and premium, if any, and
interest payable on redemption (other than interest payable on
April 22 and October 22) will be made at the office of the
Trustee, upon surrender of the 9-1/2% Debentures.

23
<PAGE>

Optional Redemption

The 9-1/2% Debentures are redeemable at the option of AFC,
as a whole or in part, on not less than 30 nor more than 60 days'
written notice, at 100% of the principal amount together with
interest accrued to the date fixed for redemption.

The 9-1/2% Debentures are redeemable on similar notice
through operation of a Sinking Fund, as referred to below, at the
principal amount thereof together with accrued interest to the
redemption date. Redemptions will be made with the Trustee
determining the particular 9-1/2% Debentures to be redeemed by
lot at its discretion. (Article Four)

Sinking Fund

AFC is obligated to retire, at 100% of the principal amount
thereof, plus accrued interest, on April 22 in each of the years
through 1998, inclusive, 5% of the original principal amount of
9-1/2% Debentures issued under the Indenture, subject to credits
at AFC's option for the principal amount of 9-1/2% Debentures
purchased or redeemed otherwise than through the operation of the
Sinking Fund provisions and not previously credited. Operation
of the mandatory sinking fund is intended to have the effect of
retiring 70% of the outstanding 9-1/2% Debentures prior to
maturity. In addition, AFC at its option may retire on April 22
in each of the years through 1998, inclusive at the same price,
up to an additional 5% of the 9-1/2% Debentures issued; such
optional right of redemption to be noncumulative. (Section 4.03)

Subordination

The 9-1/2% Debentures are subordinated as to principal and
interest to all Senior Indebtedness (as defined in the
Indenture).

No Financial Covenants

The Indenture contains no financial covenants.

Modification and Satisfaction of Indentures

The Indenture may be amended or supplemented by AFC and the
Trustee with the consent of the holders of not less than a
majority in principal amount of the 9-1/2% Debentures then
outstanding; but no modification of the terms of payment of
principal or interest on the 9-1/2% Debentures (including the
Sinking Fund) and no modification impairing or reducing the
percentage required for modification will be effective against
any holder without his consent. (Section 9.02). The Indenture
may be satisfied and discharged upon cancellation of all the 9-
1/2% Debentures or, under certain conditions, upon deposit with
the Trustee of funds or securities sufficient therefor.
(Sections 2.09 and 8.01)

24
<PAGE>

Limitations on Claims in Bankruptcy or on Acceleration Upon an
Event of Default

Under the Indenture the Trustee or the holders of 25% of the
9-1/2% Debentures may declare an acceleration if an Event of
Default occurs and is continuing, even if the bankruptcy of AFC
does not result in or was not the cause of the Event of Default.
Under the terms of the Indenture, should an acceleration be
declared as a result of the occurrence and continuation of an
Event of Default absent bankruptcy, the claim of a holder of 9-
1/2% Debentures is for the full principal amount of his
Debenture. (Section 6.02). The amount that a holder would be
able to recover from AFC, under a bankruptcy or an event of
default, may, however, be limited by applicable law to the issue
price (the market value at the time of issuance) of the Debenture
plusthe portionofanyoriginal issuediscountwhichhas beenamortized.

Events of Default

The following events are defined in the Indenture as "Events
of Default": failure to pay principal or premium when due for 30
days; failure to pay interest when due for 30 days; failure to
perform any other covenants in the Indenture for 90 days after
notice; or certain events of bankruptcy, insolvency or
reorganization of AFC. Upon the happening and during the
continuance of any Event of Default, the Trustee or the holders
of at least 25% in principal amount of the outstanding 9-1/2%
Debentures may declare the principal and accrued interest of all
9-1/2% Debentures due and payable. The Indenture provides that
such declaration and its consequences may, in certain events, be
annulled by the holders of a majority in principal amount of the
outstanding 9-1/2% Debentures. (Article Seven)

The Indenture provides that the Trustee shall, within 60
days after the occurrence of a default, give to the holders
notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods);
provided that, except in the case of default in payment of
principal of or interest in respect of the 9-1/2% Debentures, the
Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in
the interest of the holders. (Section 7.07)

AFC must furnish to the Trustee within 120 days after the
end of each fiscal year, a certificate of certain officers of AFC
as to whether such persons have knowledge of any default under
the Indenture. (Section 5.10)

The holders of a majority in aggregate principal amount of
outstanding 9-1/2% Debentures will 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, except that the Trustee shall not be so
required to act unless reasonable indemnity shall be offered
against the costs, expenses and liabilities of such act, or

25
<PAGE>

except as otherwise provided in the Indenture. (Sections 7.06
and 8.02)

DESCRIPTION OF 10% DEBENTURES

General

The 10% Debentures due October 20, 1999 (the "10%
Debentures") are unsecured obligations of AFC and were issued
under an Indenture which provides for the issuance of an
unlimited principal amount of which approximately $146 million
were outstanding on December 31, 1993. The 10% Debentures were
issuable as registered debentures without coupons in
denominations of $500 and any multiple thereof. The 10%
Debentures are exchangeable and transferable at the office of the
Trustee. No service charge is made for the transfer or exchange
of 10% Debentures, but AFC may require payment of sums sufficient
to cover any tax or other governmental charge. (Sections 2.03,
2.06 and 4.02).

Payment of Principal and Interest

The 10% Debentures bear interest at the rate of 10% per
annum which is payable semi-annually on April 20 and October 20
each year to holders of record on the April 1 and October 1 next
preceding the interest payment date. They will mature on October
20, 1999. Payments of principal and premium, if any, and
interest payable on redemption (other than interest payable on
April 20 and October 20) will be made at the office of the
Trustee, upon surrender of the 10% Debentures.

Optional Redemption

The 10% Debentures are redeemable at the option of AFC, as a
whole or in part, on not less than 30 nor more than 60 days'
written notice, at 100% of the principal amount, together with
interest accrued to the date fixed for redemption.

The 10% Debentures are redeemable on similar notice through
operation of a Sinking Fund, as referred to below, at the
principal amount thereof together with accrued interest to the
redemption date. Redemptions will be made in $500 denominations
with the Trustee determining the particular 10% Debentures to be
redeemed by lot at its discretion. (Article Three)

Sinking Fund

AFC is obligated to retire, at 100% of the principal amount
thereof, plus accrued interest, on October 20 in each of the
years through 1998, inclusive, 4% of the original principal
amount of 10% Debentures issued under the Indenture, subject to
credits at AFC's option for the principal amount of 10%
Debentures purchased or redeemed otherwise than through the
operation of the Sinking Fund provisions and not previously
credited. Operation of the mandatory sinking fund is intended to

26
<PAGE>

have the effect of retiring 40% of the outstanding 10% Debentures
prior to maturity. In addition, AFC at its option may retire on
October 20 in each of the years through 1998, inclusive at the
same price, up to an additional 4% of the 10% Debentures issued;
such optional right of redemption to be cumulative. (Article
Three)

No Financial Covenants

The Indenture contains no financial covenants.

Modification and Satisfaction of Indentures

The Indenture may be amended or supplemented by AFC and the
Trustee with the consent of the holders of not less than 66-2/3%
in principal amount of the 10% Debentures then outstanding; but
no modification of the terms of payment of principal or interest
on the 10% Debentures (including the Sinking Fund) and no
modification impairing or reducing the percentage required for
modification will be effective against any holder without his
consent. (Section 9.02). The Indenture may be satisfied and
discharged upon cancellation of all the 10% Debentures or, under
certain conditions, upon deposit with the Trustee of funds or
securities sufficient therefor. (Sections 10.02 and 12.01)

Limitations on Claims in Bankruptcy or on Acceleration Upon an
Event of Default

Under the Indenture the Trustee or the holders of 25% of the
10% Debentures may declare an acceleration if an Event of Default
occurs and is continuing, even if the bankruptcy of AFC does not
result in or was not the cause of the Event of Default. Under
the terms of the Indenture, should an acceleration be declared as
a result of the occurrence and continuation of an Event of
Default absent bankruptcy, the claim of a holder of 10%
Debentures is for the full principal amount of his Debenture.

The amount that a holder would be able to recover from AFC,
under a bankruptcy or an event of default, may, however, be
limited by applicable law to the issue price (the market value at
the time of issuance) of the Debenture plus the portion of any
original issue discount which has been amortized.

Events of Default

The following events are defined in the Indenture as "Events
of Default": failure to pay principal or premium when due for 30
days; failure to pay interest when due for 30 days; failure to
perform any other covenants in the Indenture for 30 days after
notice; certain events of bankruptcy, insolvency or
reorganization of AFC; or the occurrence of an event of default
in any other instrument under which AFC has or may issue debt
which has not been cured within 30 days after notice of such
default. Upon the happening and during the continuance of any
Event of Default, the Trustee or the holders of at least 25% in

27
<PAGE>

principal amount of the outstanding 10% Debentures may declare
the principal and accrued interest of all 10% Debentures due and
payable. The Indenture provides that such declaration and its
consequences may, in certain events, be annulled by the holders
of a majority in principal amount of the outstanding 10%
Debentures. (Article Six)

The Indenture provides that the Trustee shall, within 60
days after the occurrence of a default, give to the holders
notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods);
provided that, except in the case of default in payment of
principal of or interest in respect of the 10% Debentures, the
Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in
the interest of the holders. (Section 6.07)

AFC must furnish to the Trustee within 120 days after the
end of each fiscal year, a certificate of certain officers of AFC
as to whether such persons have knowledge of any default under
the Indenture. (Section 4.09)

The holders of a majority in aggregate principal amount of
outstanding 10% Debentures will 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, except that the Trustee shall not be so
required to act unless reasonable indemnity shall be offered
against the costs, expenses and liabilities of such act, or
except as otherwise provided in the Indenture. (Sections 6.06
and 7.02)

DESCRIPTION OF 10% DEBENTURES, SERIES A

General

The 10% Debentures due October 20, 1999, Series A (the "10%
Series A Debentures") are unsecured obligations of AFC and were
issued under an Indenture which provides for the issuance of an
unlimited principal amount of which approximately $4 million were
outstanding on December 31, 1993. The 10% Series A Debentures
were issuable as registered debentures without coupons in
denominations of $500 and any multiple thereof. The 10% Series A
Debentures are exchangeable and transferable at the office of the
Trustee. No service charge is made for the transfer or exchange
of 10% Series A Debentures, but AFC may require payment of sums
sufficient to cover any tax or other governmental charge.
(Sections 2.03, 2.06 and 4.02 of the Indenture).

Payment of Principal and Interest

The 10% Series A Debentures bear interest at the rate of 10%
per annum which is payable semi-annually on April 20 and October
20 each year to holders of record on the April 30 and October 1
next preceding the interest payment date. The 10% Series A

28
<PAGE>

Debentures are not convertible. They will mature on October 20,
1999. Payments of principal and premium, if any, and interest
payable on redemption (other than interest payable on April 20
and October 20) will be made at the office of the Trustee, upon
surrender of the 10% Series A Debentures.

The Indenture provisions of the 10% Series A Debentures are
similar to those of the 10% Debentures.

DESCRIPTION OF 12% DEBENTURES

General

The 12% Debentures due September 3, 1999 (the "12%
Debentures") are unsecured obligations of AFC and were issued
under an Indenture which provides for the issuance of an
unlimited principal amount of which approximately $90 million
were outstanding on December 31, 1993. The 12% Debentures were
issuable as registered debentures without coupons in
denominations of $1,000 and any multiple thereof. The 12%
Debentures are exchangeable and transferable at the office of the
Trustee. No service charge is made for the transfer or exchange
of 12% Debentures, but AFC may require payment of sums sufficient
to cover any tax or other governmental charge. (Sections 2.06
and 4.02 of the Indenture).

Payment of Principal and Interest

The 12% Debentures bear interest at the rate of 12% per
annum which is payable semi-annually on March 3 and September 3
each year to holders of record on the February 15 and August 15
next preceding the interest payment date. They will mature on
September 3, 1999. Payments of principal and premium, if any,
and interest payable on redemption (other than interest payable
on March 3 and September 3) will be made at the office of the
Trustee, upon surrender of the 12% Debentures. (Sections 2.03 and
4.02)

Optional Redemption

The 12% Debentures are redeemable at the option of AFC, as a
whole or in part, on not less than 30 nor more than 60 days'
written notice, at 100% of the principal amount together with
interest accrued to the date fixed for redemption.

The 12% Debentures are redeemable on similar notice through
operation of a Sinking Fund, as referred to below, at the
principal amount thereof together with accrued interest to the
redemption date. Redemptions will be made in $1,000
denominations with the Trustee determining the particular 12%
Debentures to be redeemed by lot at its discretion. (Article
Three)

29
<PAGE>

Sinking Fund

AFC is obligated to retire, at 100% of the principal amount
thereof, plus accrued interest, on September 3 in each of the
years through 1998, inclusive, 2% of the original principal
amount of 12% Debentures issued under the Indenture, subject to
credits at AFC's option for the principal amount of 12%
Debentures purchased or redeemed otherwise than through the
operation of the Sinking Fund provisions and not previously
credited. Operation of the mandatory Sinking Fund is intended to
have the effect of retiring 18% of the outstanding 12% Debentures
prior to maturity. (Section 3.03)

No Financial Covenants

The Indenture contains no financial covenants.

Modification and Satisfaction of Indentures

The Indenture may be amended or supplemented by AFC and the
Trustee with the consent of the holders of not less than 66-2/3%
in principal amount of the 12% Debentures then outstanding; but
no modification of the terms of payment of principal or interest
on the 12% Debentures (including the Sinking Fund) and no
modification impairing or reducing the percentage required for
modification will be effective against any holder without his
consent. The Indenture may be satisfied and discharged upon
cancellation of all the 12% Debentures or, under certain
conditions, upon deposit with the Trustee of funds or securities
sufficient therefor. (Sections 6.04, 10.02 and 12.01)

Limitations on Claims in Bankruptcy or on Acceleration Upon an
Event of Default

Under the Indenture the Trustee or the holders of 25% of the
12% Debentures may declare an acceleration if an Event of Default
occurs and is continuing, even if the bankruptcy of AFC does not
result in or was not the cause of the Event of Default. Under
the terms of the Indenture, should an acceleration be declared as
a result of the occurrence and continuation of an Event of
Default absent bankruptcy, the claim of a holder of 12%
Debentures is for the full principal amount of his Debenture.
(Article Six)

The amount that a holder would be able to recover from AFC,
under a bankruptcy or an event of default, may, however, be
limited by applicable law to the issue price (the market value at
the time of issuance) of the 12% Debenture plus the portion of
any original issue discount which has been amortized.

Events of Default

The following events are defined in the Indenture as "Events
of Default": failure to pay principal or premium when due for 30
days; failure to pay interest when due for 30 days; failure to

30
<PAGE>

perform any other covenants in the Indenture for 90 days after
notice; certain events of bankruptcy, insolvency or
reorganization of AFC; or the occurrence of an event of default
in any other instrument under which AFC has or may issue debt
which has not been cured within 20 days after notice of such
default. Upon the happening and during the continuance of any
Event of Default, the Trustee or the holders of at least 25% in
principal amount of the outstanding 12% Debentures may declare
the principal and accrued interest of all 12% Debentures due and
payable. The Indenture provides that such declaration and its
consequences may, in certain events, be annulled by the holders
of a majority in principal amount of the outstanding 12%
Debentures. (Article Six)

The Indenture provides that the Trustee shall, within 60
days after the occurrence of a default, give to the holders
notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods);
provided that, except in the case of default in payment of
principal of or interest in respect of the 12% Debentures, the
Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in
the interest of the holders. (Section 6.07)

AFC must furnish to the Trustee within 120 days after the
end of each fiscal year, a certificate of certain officers of AFC
as to whether such persons have knowledge of any default under
the Indenture. (Section 4.09)

The holders of a majority in aggregate principal amount of
outstanding 12% Debentures will 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, except that the Trustee shall not be so
required to act unless reasonable indemnity shall be offered
against the costs, expenses and liabilities of such act, or
except as otherwise provided in the Indenture. (Sections 6.06
and 7.02)

DESCRIPTION OF 12% DEBENTURES, SERIES A

General

The 12% Debentures due September 3, 1999, Series A (the "12%
Series A Debentures") are unsecured obligations of AFC and were
issued under an Indenture which provides for the issuance of an
unlimited principal amount of which approximately $41 million
were outstanding on December 31, 1993. The 12% Series A
Debentures were issuable as registered debentures without coupons
in denominations of $1,000 and any multiple thereof. The 12%
Series A Debentures are exchangeable and transferable at the
office of the Trustee. No service charge is made for the
transfer or exchange of 12% Series A Debentures, but AFC may

31
<PAGE>

require payment of sums sufficient to cover any tax or other
governmental charge. (Sections 2.06 and 4.02 of the Indenture).

Payment of Principal and Interest

The 12% Series A Debentures bear interest at the rate of 12%
per annum which is payable semi-annually on March 3 and September
3 each year to holders of record on the February 15 and August 15
next preceding the interest payment date. They will mature on
September 3, 1999. Payments of principal and premium, if any,
and interest payable on redemption (other than interest payable
on March 3 and September 3) will be made at the office of the
Trustee, upon surrender of the 12% Series A Debentures. (Sections
2.02 and 4.02)

The Indenture provisions of the 12% Series A Debentures are
similar to those of the 12% Debentures.

DESCRIPTION OF 12% DEBENTURES, SERIES B

General

The 12% Debentures due September 3, 1999, Series B (the "12%
Series B Debentures") are unsecured obligations of AFC and were
issued under an Indenture which provides for the issuance of an
unlimited principal amount of which approximately $59 million
were outstanding on December 31, 1993. The 12% Series B
Debentures were issuable as registered debentures without coupons
in denominations of $1,000 and any multiple thereof. The 12%
Series B Debentures are exchangeable and transferable at the
office of the Trustee. No service charge is made for the
transfer or exchange of 12% Series B Debentures, but AFC may
require payment of sums sufficient to cover any tax or other
governmental charge. (Sections 2.06 and 4.02 of the Indenture).

Payment of Principal and Interest

The 12% Series B Debentures bear interest at the rate of 12%
per annum which is payable semi-annually on March 3 and September
3 each year to holders of record on the February 15 and August 15
next preceding the interest payment date. They will mature on
September 3, 1999. Payments of principal and premium, if any,
and interest payable on redemption (other than interest payable
on March 3 and September 3) will be made at the office of the
Trustee, upon surrender of the 12% Series B Debentures. (Sections
2.02 and 4.02)

The Indenture provisions of the 12% Series B Debentures are
similar to those of the 12% Debentures and 12% Debentures, Series
A.

32
<PAGE>

DESCRIPTION OF 12-1/4% DEBENTURES

General

The 12-1/4% Debentures due September 15, 2003 (the "12-1/4%
Debentures") are unsecured obligations of AFC and were issued
under an Indenture which provides for the issuance of up to $500
million principal amount of which approximately $128 million were
outstanding on December 31, 1993. The 12-1/4% Debentures were
issuable as registered debentures without coupons in
denominations of $1,000 and any multiple thereof. The 12-1/4%
Debentures are exchangeable and transferable at the office of the
Trustee. No service charge is made for the transfer or exchange
of 12-1/4% Debentures, but AFC may require payment of sums
sufficient to cover any tax or other governmental charge.
(Sections 2.03 and 2.06 of the Indenture).

Payment of Principal and Interest

The 12-1/4% Debentures bear interest at the rate of 12-1/4%
per annum which is payable semi-annually on March 15 and
September 15 each year to holders of record on the March 1 and
September 1 next preceding the interest payment date. They will
mature on September 15, 2003. Payments of principal and premium,
if any, and interest payable on redemption (other than interest
payable on March 15 and September 15) will be made at the office
of the Paying Agent in Cincinnati, Ohio, upon surrender of the
12-1/4% Debentures. (Section 3.01)

Optional Redemption

The Debentures are redeemable at the option of AFC, as a
whole or in part, on not less than 30 nor more than 60 days'
written notice, at the following prices, expressed in percentage
of the principal amount, together with interest accrued to the
date fixed for redemption. If redeemed during:

Redemption
Year Price

1994 . . . . . 103.75%
1995 . . . . . 102.50%
1996 . . . . . 101.25%
1997 and thereafter 100.00%

The 12-1/4% Debentures are redeemable on similar notice
through operation of a Sinking Fund, as referred to below, at the
principal amount thereof together with accrued interest to the
redemption date. Redemptions will be made in $1,000
denominations with the Trustee determining the particular 12-1/4%
Debentures to be redeemed by lot at its discretion. (Sections
4.01, 4.02 and 4.03)

Sinking Fund

33
<PAGE>

AFC will be obligated to retire, at 100% of the principal
amount thereof, plus accrued interest, on September 15 in each of
the years 1998 through 2002, inclusive, 5% of the original
principal amount of 12-1/4% Debentures issued under the
Indenture, subject to credits at AFC's option for the principal
amount of 12-1/4% Debentures purchased or redeemed otherwise than
through the operation of the Sinking Fund provisions and not
previously credited. Operation of the mandatory Sinking Fund is
intended to have the effect of retiring 25% of the outstanding
12-1/4% Debentures prior to maturity. (Section 4.07)

No Financial Covenants

The Indenture contains no financial covenants.

Modification and Satisfaction of Indentures

The Indenture may be amended or supplemented by AFC and the
Trustee with the consent of the holders of not less than a
majority in principal amount of the 12-1/4% Debentures then
outstanding; but no modification of the terms of payment of
principal or interest on the 12-1/4% Debentures (including the
Sinking Fund) and no modification impairing or reducing the
percentage required for modification will be effective against
any holder without his consent. (Section 9.02). The Indenture
may be satisfied and discharged upon cancellation of all the 12-
1/4% Debentures or, under certain conditions, upon deposit with
the Trustee of funds or securities sufficient therefor.
(Sections 2.09 and 8.01)

Limitations on Claims in Bankruptcy or on Acceleration Upon an
Event of Default

Under the Indenture the Trustee or the holders of 25% of the
12-1/4% Debentures may declare an acceleration if an Event of
Default occurs and is continuing, even if the bankruptcy of AFC
does not result in or was not the cause of the Event of Default.
Under the terms of the Indenture, should an acceleration be
declared as a result of the occurrence and continuation of an
Event of Default absent bankruptcy, the claim of a holder of 12-
1/4% Debentures is for the full principal amount of his
Debenture. (Section 6.02)

The amount that a holder would be able to recover from AFC,
under a bankruptcy or an event of default, may, however, be
limited by applicable law to the issue price (the market value at
the time of issuance) of the Debenture plus the portion of any
original issue discount which has been amortized.

Events of Default

34
<PAGE>

notice; certain events of bankruptcy, insolvency or
reorganization of AFC; the occurrence of an event of default in
any other instrument under which AFC has or may issue debt which
has not been cured within 30 days after notice of such default;
or failure to pay any funded debt in excess of $10,000,000 now
existing or existing after the date of the Indenture within 20
days after stated maturity. Upon the happening and during the
continuance of any Event of Default, the Trustee or the holders
of at least 25% in principal amount of the outstanding 12-1/4%
Debentures may declare the principal and accrued interest of all
12-1/4% Debentures due and payable. The Indenture provides that
such declaration and its consequences may, in certain events, be
annulled by the holders of a majority in principal amount of the
outstanding 12-1/4% Debentures. (Article Six)

The Indenture provides that the Trustee shall, within 90
days after the occurrence of a default, give to the holders
notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods);
provided that, except in the case of default in payment of
principal of or interest in respect of the 12-1/4% Debentures,
the Trustee shall be protected in withholding such notice if it
in good faith determines that the withholding of such notice is
in the interest of the holders. (Section 7.05)

AFC must furnish to the Trustee within 120 days after the
end of each fiscal year, a certificate of certain officers of AFC
as to whether such persons have knowledge of any default under
the Indenture. (Section 3.04)

The holders of a majority in aggregate principal amount of
outstanding 12-1/4% Debentures will 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, except that the Trustee shall not be so
required to act unless reasonable indemnity shall be offered
against the costs, expenses and liabilities of such act, or
except as otherwise provided in the Indenture. (Sections 6.05
and 7.01)

DESCRIPTION OF 13-1/2% DEBENTURES

General

The 13-1/2% Debentures due September 14, 2004 (the "13-1/2%
Debentures") are unsecured obligations of AFC and were issued
under an Indenture which provides for the issuance of up to $150
million principal amount of which approximately $26 million were
outstanding on December 31, 1993. The 13-1/2% Debentures were
issuable as registered debentures without coupons in
denominations of $500 and any multiple thereof. The 13-1/2%
Debentures are exchangeable and transferable at the office of the
Trustee. No service charge is made for the transfer or exchange
of 13-1/2% Debentures, but AFC may require payment of sums

35
<PAGE>

sufficient to cover any tax or other governmental charge.
(Sections 2.03 and 2.06).

Payment of Principal and Interest

The 13-1/2% Debentures bear interest at the rate of 13-1/2%
per annum which is payable semi-annually on March 14 and
September 14 each year to holders of record on the March 1 and
September 1 next preceding the interest payment date. They will
mature on September 14, 2004. Payments of principal and premium,
if any, and interest payable on redemption (other than interest
payable on March 14 and September 14) will be made at the office
of the Paying Agent in Cincinnati, Ohio, upon surrender of the
13-1/2% Debentures. (Section 3.01)

Optional Redemption

The 13-1/2% Debentures are redeemable at the option of AFC,
as a whole or in part, on not less than 30 nor more than 60 days'
written notice, at 100% of the principal amount, together with
interest accrued to the date fixed for redemption.

The 13-1/2% Debentures are redeemable on similar notice
through operation of a Sinking Fund, as referred to below, at the
principal amount thereof together with accrued interest to the
redemption date. Redemptions will be made in $1,000
denominations with the Trustee determining the particular 13-1/2%
Debentures to be redeemed by lot at its discretion. (Sections
4.01, 4.02 and 4.03)

Sinking Fund

AFC will be obligated to retire, at 100% of the principal
amount thereof, plus accrued interest, on September 14 in each of
the years 1995 through 2003, inclusive, 3% of the original
principal amount of 13-1/2% Debentures issued under the
Indenture, subject to credits at AFC's option for the principal
amount of 13-1/2% Debentures purchased or redeemed otherwise than
through the operation of the Sinking Fund provisions and not
previously credited. Operation of the mandatory Sinking Fund is
intended to have the effect of retiring 27% of the outstanding
13-1/2% Debentures prior to maturity. (Section 4.07)

No Financial Covenants

The Indenture contains no financial covenants.

Modification and Satisfaction of Indentures

The Indenture may be amended or supplemented by AFC and the
Trustee with the consent of the holders of not less than a
majority in principal amount of the 13-1/2% Debentures then
outstanding; but no modification of the terms of payment of
principal or interest on the 13-1/2% Debentures (including the
Sinking Fund) and no modification impairing or reducing the

36
<PAGE>

percentage required for modification will be effective against
any holder without his consent. (Section 9.02). The Indenture
may be satisfied and discharged upon cancellation of all the 13-
1/2% Debentures or, under certain conditions, upon deposit with
the Trustee of funds or securities sufficient therefor.
(Sections 2.09 and 8.01)

Limitations on Claims in Bankruptcy or on Acceleration Upon an
Event of Default

Under the Indenture the Trustee or the holders of 25% of the
13-1/2% Debentures may declare an acceleration if an Event of
Default occurs and is continuing, even if the bankruptcy of AFC
does not result in or was not the cause of the Event of Default.
Under the terms of the Indenture, should an acceleration be
declared as a result of the occurrence and continuation of an
Event of Default absent bankruptcy, the claim of a holder of 13-
1/2% Debentures is for the full principal amount of his
Debenture. (Section 6.02)

The amount that a holder would be able to recover from AFC,
under a bankruptcy or an event of default, may, however, be
limited by applicable law to the issue price (the market value at
the time of issuance) of the 13-1/2% Debenture plus the portion
of any original issue discount which has been amortized.

Events of Default

The following events are defined in the Indenture as "Events
of Default": failure to pay principal or premium when due for 20
days; failure to pay interest when due for 30 days; failure to
perform any other covenants in the Indenture for 90 days after
notice; certain events of bankruptcy, insolvency or
reorganization of AFC; the occurrence of an event of default in
any other instrument under which AFC has or may issue debt which
has not been cured within 30 days after notice of such default;
or failure to pay any funded debt now existing or existing after
the date of the Indenture within 20 days after stated maturity.
Upon the happening and during the continuance of any Event of
Default, the Trustee or the holders of at least 25% in principal
amount of the outstanding 13-1/2% Debentures may declare the
principal and accrued interest of all 13-1/2% Debentures due and
payable. The Indenture provides that such declaration and its
consequences may, in certain events, be annulled by the holders
of a majority in principal amount of the outstanding 13-1/2%
Debentures. (Article Six)

The Indenture provides that the Trustee shall, within 90
days after the occurrence of a default, give to the holders
notice of all uncured defaults known to it (the term default to
include the events specified above without grace periods);
provided that, except in the case of default in payment of
principal of or interest in respect of the 13-1/2% Debentures,
the Trustee shall be protected in withholding such notice if it

37
<PAGE>

in good faith determines that the withholding of such notice is
in the interest of the holders. (Section 7.05)

AFC must furnish to the Trustee within 120 days after the
end of each fiscal year, a certificate of certain officers of AFC
as to whether such persons have knowledge of any default under
the Indenture. (Section 3.04)

The holders of a majority in aggregate principal amount of
outstanding 13-1/2% Debentures will 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, except that the Trustee shall not be so
required to act unless reasonable indemnity shall be offered
against the costs, expenses and liabilities of such act, or
except as otherwise provided in the Indenture. (Sections 6.05
and 7.01)

DESCRIPTION OF 13-1/2% DEBENTURES, SERIES A

General

The 13-1/2% Debentures due September 14, 2004, Series A (the
"13-1/2% Series A Debentures") are unsecured obligations of AFC
and were issued under an Indenture which provides for the
issuance of an unlimited principal amount of which approximately
$48 million were outstanding on December 31, 1993. The 13-1/2%
Series A Debentures were issuable as registered debentures
without coupons in denominations of $500 and any multiple
thereof.

The Indenture provisions of the 13-1/2% Series A Debentures
are similar to those of the 13-1/2% Debentures.

<PAGE>

38
<PAGE>

(NG2-400.#14)

LETTER OF TRANSMITTAL
TO EXCHANGE SECURITIES FOR
AMERICAN FINANCIAL CORPORATION
9-1/2% Debentures due April 20,, 2004
Tendered pursuant to the Exchange Offer dated February 22, 1994
which will expire at 5:00 P.M., Cincinnati time, on March 25, 1994 unless
extended by American Financial Corporation
_________________________________________________________________

_________________________________________________________________
This Letter of Transmittal may be used to transmit American Financial
Corporation securities tendered pursuant to the Exchange Offer dated
February 22, 1994 (the "Offer"), receipt of which is acknowledged. This
Letter of Transmittal and your securities may be sent or delivered to
Securities Transfer Company (the "Exchange Agent"):

By Mail:
Securities Transfer Company
P.O. Box 1906
Cincinnati, Ohio 45273-9142

By Hand or Overnight Delivery:
Securities Transfer Company
One East Fourth Street, Suite 1201
Cincinnati, Ohio 45202

513) 579-2414 -or- (800) 368-3417

PLEASE FILL IN ALL APPLICABLE BLANKS, FOLLOW ALL INSTRUCTIONS CAREFULLY AND
SIGN THIS LETTER OF TRANSMITTAL IN THE SPACE
PROVIDED BELOW

I. DESCRIPTION OF SECURITIES TENDERED

The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign
and transfer the securities listed in the table to the right and
does hereby tender such securities pursuant to the terms and
<PAGE>

conditions of the Offer. The undersigned certifies that American
Financial Corporation will acquire good and unencumbered title to
such securities upon acceptance.

Please sign and date below. All registered holders
should sign EXACTLY as their names appear on the
certificates.

Signature(s): ____________________________________________
____________________________________________
(All registered holders must sign in the appropriate capacity)

Date: ____________________________________________

Daytime Telephone Number (Include Area Code): ( )

Certificate Number, Amount

Total Amount Enclosed

If your securities have been lost, stolen or destroyed please see
instruction number 7 on the reverse side of this Letter of Transmittal.

Sections II and III are to be filled in ONLY if issuance or delivery is to
be to a name or address other than as shown above.

II. SPECIAL ISSUANCE INSTRUCTIONS

Social Security or Tax Identification Number:____________________

Name:____________________________________________________________

Address:_________________________________________________________

_________________________________________________________________
(City) (State) (Zip)

III. SPECIAL MAILING INSTRUCTIONS

Name: ___________________________________________________________

Address:_________________________________________________________

_________________________________________________________________
(City) (State) (Zip)

Signature Guarantee
If you are requesting Special Issuance or Special Mailing
Instructions your signature must be guaranteed in the space at
the right by a member of a Securities Transfer Association
recognized Medallion Signature Guarantee Program. Please ask
your bank or broker for the name of an institution authorized to
guarantee signatures.

(Affix Medallion Guarantee Stamp Below)

IMPORTANT: See reverse side for Instructions
<PAGE>

INSTRUCTIONS

1. CERTIFICATES SHOULD BE INCLUDED with this Letter of Transmittal. A
photocopy or facsimile of a Letter of Transmittal may also be used to
tender securities.

2. SIGN AND DATE THE LETTER OF TRANSMITTAL. If the certificates are
owned of record by two or more persons, all such owners should sign
this Letter of Transmittal. If a holder has securities registered
differently on separate certificates, separate Letters of Transmittal
should be submitted for each different registration of certificates.

3. Certificates tendered by executors, administrators, trustees,
guardians, corporations and the like should be accompanied by proper
evidence of authority of the person who executes the Letter of
Transmittal. The adequacy of such evidence must be established to the
satisfaction of Securities Transfer Company.

4. THE DEBENTURE CERTIFICATES AND ANY CHECKS WILL BE ISSUED AND MAILED TO
THE REGISTERED HOLDER unless instructions to the contrary are
contained in the boxes identified as II and III on the reverse side
hereof and signatures are guaranteed.

5. COMPLETE AND SIGN THE FORM W-9/W-8 BELOW. FAILURE TO COMPLETE THIS
SECTION MAY RESULT IN BACKUP WITHHOLDING OF 31% ON ANY PAYMENTS MADE
TO YOU.

SUBSTITUTE FORM W-9
(U.S. Citizens & Residents)
If you are a citizen of the U.S. or a foreign person residing
in the U.S., please complete this section. Failure to do so will result in
a withholding of taxes.

Social Security Number:__________________________________________

Employer Identification Number: _________________________________

Certification: Under penalties of perjury, I certify that the
information provided on this form is true, correct, and complete and that I
have not been notified by the IRS that I am subject to back-up withholding
per the Internal Revenue Code.

Signature:_____________________________ Date:____________________

SUBSTITUTE FORM W-8
(Nonresident Aliens)

If you are neither a citizen nor resident of the U. S., please complete
this section. Failure to do so will result in a withholding of taxes
remittable to the U.S. Government.

Country of Tax Residency:________________________________________
Country of Citizenship:__________________________________________

Certification: Under penalties of perjury, I certify that, to the best of
my knowledge and belief,, I qualify as a foreign person
or entity exempt from back-up withholding and/or information reporting.

Signature:_____________________________ Date:____________________
<PAGE>

6. This Letter of Transmittal and certificates should be delivered as
indicated on the front side. The method you use to deliver this
Letter of Transmittal and certificates is at your option and risk. A
self-addressed envelope has been enclosed for your convenience. If
delivery is by mail, you may want to use insured registered mail with
return receipt requested. However, Post Office regulations prohibit
use of the enclosed mailing permit envelope for such registered mail.
You should use a plain envelope for that purpose.

7. Any securityholder whose certificates have been lost, stolen or
destroyed should complete the Lost Certificate Affidavit below and
sign and date Section I on the front side:

LOST CERTIFICATE AFFIDAVIT
(If known, please enter certificate information)

The undersigned hereby certifies that the undersigned is the rightful owner
of the securities listed at the right and that the certificates
representing such securities have been lost,, stolen or destroyed. The
undersigned agrees to indemnify American Financial Corporation and its
successors against any future claims incurred by it due to the loss of
these certificates.

Please sign and date below. All registered holders should sign EXACTLY as
their names appear on the certificates.

Signature(s):____________________________________________________
____________________________________________________
(All registered holders must sign in the appropriate capacity)

Date: ____________________________________________________
Daytime Telephone Number (Include Area Code): ( )
Certificate Number Amount

Total

GUARANTEE OF DELIVERY (To be completed only if certificates are not
tendered herewith.)

The undersigned guarantees to deliver the securities tendered by this
Letter of Transmittal not later than seven days after receipt of this
Letter of Transmittal by the Exchange Agent.

(Affix Medallion Guarantee Stamp Below)

Name of Firm ____________________________________________________

Contact Person___________________________________________________

Telephone Number_________________________________________________

Address__________________________________________________________

THIS LETTER OF TRANSMITTAL, TOGETHER WITH YOUR CERTIFICATE(S)
MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR
TO THE EXPIRATION DATE
ng2-420.lt
<PAGE>

<PAGE>