<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 24, 1997
Filed Pursuant to Rule 424(b)(5)
File No. 333-37231
[LOGO]
$500,000,000
Fleet Financial Group, Inc.
6 7/8% Subordinated Debentures Due 2028
Interest payable January 15 and July 15 Due January 15, 2028
----------------
The Subordinated Debentures are unsecured and subordinated as set forth in the
accompanying Prospectus under "Subordinated Debt Securities--Subordination".
The Subordinated Debentures may not be redeemed prior to maturity. As of
September 30, 1997, the principal amount of Senior Indebtedness of Fleet
Financial Group, Inc. ("Fleet") and Fleet's obligations under Other
Financial Obligations (each as defined in the accompanying
Prospectus) aggregated approximately $1.9 billion (holding company
only). Payment of principal of the Subordinated Debentures may be
accelerated only in the case of the bankruptcy, insolvency or
reorganization of Fleet. There is no right of acceleration in
the case of a default in the payment of interest on the
Subordinated Debentures or in the performance of any other
covenant of Fleet. See "Subordinated Debt Securities" in
the accompanying Prospectus.
The Subordinated Debentures will be represented by Global Securities registered
in the name of the nominee of The Depository Trust Company (the "Depository").
Interests in the Global Securities will be shown on, and transfers thereof
will be effected only through, records maintained by the Depository and
its participants.
Except as provided herein, Subordinated Debentures in definitive form
will not be issued. Settlement for the Subordinated Debentures will
be made in immediately available funds. The Subordinated
Debentures will trade in the Depository's Same-Day Funds
Settlement System until maturity, and secondary market
trading activity for the Subordinated Debentures will
therefore settle in immediately available funds. All
payments of principal and interest will be made by
Fleet in immediately available funds. See
"Description of Subordinated
Debentures--Same-Day Settlement and Payment".
THE SUBORDINATED DEBENTURES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF FLEET AND ARE NOT INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY
OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Fleet(1)(2)
------------------ ------------------ ------------------
<S> <C> <C> <C>
Per Subordinated Debenture............................... 99.122% .875% 98.247%
Total.................................................... $495,610,000 $4,375,000 $491,235,000
</TABLE>
(1) Plus accrued interest, if any, from January 15, 1998.
(2) Before deduction of expenses payable by Fleet estimated at $175,000.
The Subordinated Debentures are offered by the several Underwriters when, as
and if issued by Fleet, delivered to and accepted by, the Underwriters and
subject to their right to reject orders in whole or in part. It is expected that
delivery of the Subordinated Debentures, in book-entry form, will be made
through the facilities of the Depository on or about January 15, 1998, against
payment in immediately available funds.
Credit Suisse First Boston
Chase Securities Inc.
Goldman, Sachs & Co.
J.P. Morgan & Co.
<PAGE>
Salomon Smith Barney
Prospectus Supplement dated January 12, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SUBORDINATED
DEBENTURES OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS,
SYNDICATE SHORT COVERING TRANSACTIONS, AND PENALTY BIDS. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING".
AVAILABLE INFORMATION
THIS SECTION REPLACES THE SECTION ENTITLED "AVAILABLE INFORMATION" IN THE
ACCOMPANYING PROSPECTUS.
Fleet is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning Fleet can be inspected and copied at the
Commission's office at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the Commission's Regional Offices in New York (Suite
1300, Seven World Trade Center, New York, New York 10048) and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661), and copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates or by accessing the Commission's World Wide Web site
at http://www.sec.gov. The common stock, $.01 par value, of Fleet (the "Common
Stock") is listed on the New York Stock Exchange. Reports, proxy material and
other information concerning Fleet also may be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005. This
Prospectus Supplement and the accompanying Prospectus do not contain all the
information set forth in the Registration Statement and Exhibits thereto which
Fleet has filed with the Commission under the Securities Act of 1933, as amended
(the "Act"), which may be obtained from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed fees, and to which reference is hereby
made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS SECTION REPLACES THE SECTION ENTITLED "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" IN THE ACCOMPANYING PROSPECTUS.
The following documents filed with the Commission by Fleet are incorporated
in this Prospectus Supplement by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1996.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997.
3. Current Reports on Form 8-K dated January 15, 1997, February 4, 1997,
April 16, 1997, July 16, 1997, October 15, 1997, November 10, 1997
and December 10, 1997.
Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed with the Commission by Fleet pursuant to Sections 13, 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus
Supplement and prior to the termination of the offering of the Subordinated
Debentures offered hereby are incorporated herein by reference and such
documents shall be deemed to be a part hereof from the date of filing of such
documents. Any statement contained in this Prospectus Supplement and
accompanying Prospectus or in a document incorporated or deemed to be
Incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus Supplement and accompanying Prospectus to the
extent that a statement
S-2
<PAGE>
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus Supplement
and accompanying Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS SUPPLEMENT AND ACCOMPANYING
PROSPECTUS MAY OBTAIN, WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST, A COPY OF
ANY OF THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN (OTHER THAN THE EXHIBITS
TO SUCH DOCUMENTS). WRITTEN REQUESTS SHOULD BE MAILED TO INVESTOR RELATIONS
DEPARTMENT, FLEET FINANCIAL GROUP, INC., ONE FEDERAL STREET, BOSTON,
MASSACHUSETTS 02110. TELEPHONE REQUESTS MAY BE DIRECTED TO (617) 346-4000.
S-3
<PAGE>
FLEET FINANCIAL GROUP, INC.
THIS SECTION REPLACES THE SECTION ENTITLED "FLEET FINANCIAL GROUP, INC. --
GENERAL" IN THE ACCOMPANYING PROSPECTUS.
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. At September 30, 1997, Fleet was the 12th largest
bank holding company in the United States, with total assets of $83.6 billion,
total deposits of $62.9 billion and stockholders' equity of $7.2 billion.
Fleet is engaged in a general consumer and commercial banking and investment
management business throughout the states of Connecticut, Massachusetts, New
Jersey, New York, Rhode Island, Maine, New Hampshire and Florida through its
five banking subsidiaries, and also provides, through its nonbanking
subsidiaries, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, capital markets services and investment banking, investment
advice and management, data processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 346-4000.
RECENT TRANSACTIONS
Consistent with Fleet's strategy to combine the strengths of a leading
regional bank with the national distribution capabilities of a diversified
financial services company, Fleet has agreed to make three acquisitions which
will expand its investment advisory, discount brokerage and credit card business
lines, as well as to expand the number and geographic diversity of its customer
base. As a result of these acquisitions, customers served by Fleet are expected
to increase from approximately 6.2 million to approximately 13.2 million and
revenue from outside New England is expected to increase to over 50% of Fleet's
total revenue.
COLUMBIA MANAGEMENT COMPANY
On December 10, 1997, Fleet consummated its acquisition of Columbia
Management Company ("Columbia"), a Portland, Oregon-based asset manager with
1996 revenues of $96 million and assets under management of $20.9 billion as of
November 30, 1997, including a family of no-load mutual funds. The premium paid
for the purchase of Columbia was $400 million. The agreement stipulates
potential earnout and management retention incentives to be paid over six years.
The acquisition of Columbia increases Fleet's investment advisory assets under
management by 40% and broadens its institutional product and mutual fund
offerings and both retail and institutional national client base. Columbia will
be managed as an independent business unit of Fleet, with senior members of
Columbia's management committed to remain with Fleet. Fleet accounted for this
acquisition under the purchase method of accounting.
THE QUICK & REILLY GROUP, INC.
On September 17, 1997, Fleet announced that it had entered into an agreement
to acquire The Quick & Reilly Group, Inc. ("Quick & Reilly") at an exchange
ratio of 0.578 shares of Common Stock for each share of Quick & Reilly common
stock. As of October 31, 1997, approximately 38.6 million shares of Quick &
Reilly common stock were issued and outstanding. Quick & Reilly is the third
largest discount brokerage firm in the United States, with revenues for its
fiscal year ended February 28, 1997 of $507 million.
The Quick & Reilly transaction will give Fleet the opportunity to
significantly expand its distribution channels for its consumer banking,
investment management services, discount brokerage services and sales of its
mutual fund and annuity products. The transaction will also allow Fleet to
expand its retail customer base and provide its existing customers with
additional investment and securities products. Quick & Reilly will be operated
as an independent operation within Fleet's investment management services
division. As part of the transaction, the top six members of Quick & Reilly's
management have entered into five-year
S-4
<PAGE>
employment agreements to continue with Fleet following the closing. The
agreement also provides for management retention and performance-based
incentives to be paid to Quick & Reilly's senior managers over three years.
Quick & Reilly operates as a holding company for its four principal
operating subsidiaries: Quick & Reilly, Inc. ("Q&R, Inc."), a New York Stock
Exchange member organization performing discount brokerage services for
individual retail customers; U.S. Clearing Corp., a securities clearing
operation which clears all securities transactions for Q&R, Inc.'s customer
accounts and other correspondent brokerage firms; JJC Specialist Corp., one of
the largest specialist firms on the floor of the New York Stock Exchange, making
a market in the equity securities of New York Stock Exchange-listed companies;
and Nash Weiss & Co., a brokerage firm which acts as a market maker in
over-the-counter securities.
The acquisition, to be accounted for as a pooling of interests, is expected
to close early in the first quarter of 1998.
ADVANTA CORPORATION
On October 28, 1997, Fleet agreed to acquire the credit card operations of
Advanta Corporation ("Advanta") for a premium of approximately $500 million,
with an aggregate potential $100 million earnout to be paid over five years.
Advanta's credit card operations, which earned $30 million in the third quarter
of 1997, will add approximately $11.5 billion in managed credit card
receivables. Following consummation of this transaction and the combination of
Fleet's credit card operations with those of Advanta's, Fleet believes that it
will be among the top ten issuers of credit cards in the United States, with
approximately $14 billion in managed receivables and over 8 million customers.
The acquisition of Advanta's credit card operations will allow Fleet to
compete on a larger scale in a competitive environment of credit card business
consolidations in order to retain and grow Fleet's customer base. Fleet believes
that this acquisition will enhance Fleet's credit card operations by providing
the opportunity to combine Fleet's risk management practices with Advanta's
state of the art database technology, direct marketing, and product testing
capabilities in the credit card business.
The transaction, to be accounted for under the purchase method of
accounting, is expected to close in the first quarter of 1998.
S-5
<PAGE>
THIRD QUARTER RESULTS
Fleet reported net income of $329 million for the third quarter of 1997, or
$1.20 per common share, an increase of 18%, compared to $295 million, or $1.02
per common share, earned in the third quarter of 1996. Return on average assets
and return on common equity for the third quarter of 1997 were 1.60% and 19.89%,
respectively, as compared to 1.35% and 17.83%, respectively, for the third
quarter of 1996. Net income for the first nine months of 1997 was $968 million,
or $3.48 per common share, an increase of 20%, compared to $836 million, or
$2.91 per common share, for the first nine months of 1996.
Net interest income totaled $926 million during the third quarter of 1997,
an increase of $10 million from the second quarter of 1997 and a decrease of $8
million from the third quarter of 1996. The increase in net interest income from
the second quarter is primarily attributable to $1.1 billion of growth in the
loan portfolio. Net interest margin for the third quarter of 1997 was 5.23%,
compared to 5.25% for the second quarter of 1997 and 5.01% for the third quarter
of 1996.
The provision for credit losses in the third quarter of 1997 was $85
million, as compared to $65 million for the third quarter of 1996. Net
charge-offs for the third quarter of 1997 were $93 million, as compared to $110
million for the third quarter of 1996, the result of continued improvement in
Fleet's commercial credit portfolios. Nonperforming assets in the third quarter
of 1997 totaled $479 million, a decrease of $52 million from the second quarter
of 1997 and $280 million from the third quarter of 1996. The reserve for credit
losses was $1.4 billion, $1.4 billion and $1.5 billion at September 30, 1997,
June 30, 1997 and September 30, 1996, respectively. The reserve for credit
losses represented 2.4%, 2.5% and 2.6% of total loans at September 30, 1997,
June 30, 1997 and September 30, 1996, respectively.
Noninterest income in the third quarter of 1997 totaled $514 million, an
increase of $30 million over the third quarter of 1996, after adjusting for
divested businesses. While growth was experienced in nearly all major core
noninterest revenue categories, the results of certain strategic initiatives
were particularly noteworthy. After adjusting for the sales of the corporate
trust business, investment services revenue in the third quarter of 1997
increased by $16 million, or 18%, from the third quarter of 1996 due to growth
in the levels of managed assets fueled by the strong equity market. Revenues in
the third quarter of 1997 from the corporate finance division, which was
established in March 1996, increased by $18 million to $21 million from the
third quarter of 1996. Noninterest expense in the third quarter of 1997 totaled
$791 million, a decrease of $70 million as compared to $861 million during the
third quarter of 1996.
Total assets at September 30, 1997 were $83.6 billion, compared to $83.4
billion at June 30, 1997. Stockholders' equity amounted to $7.2 billion at
September 30, 1997, compared to $7.0 billion at June 30, 1997.
S-6
<PAGE>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
THIS SECTION REPLACES THE SECTION ENTITLED "CONSOLIDATED RATIOS OF EARNINGS
TO FIXED CHARGES" IN THE ACCOMPANYING PROSPECTUS.
Fleet's consolidated ratios of earnings to fixed charges were as follows for
the years and periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
QUARTER ENDED ------------------------------------
SEPTEMBER 30, 1997 1996 1995 1994 1993 1992
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges:
Excluding Interest on
Deposits.................. 4.41x 3.62x 1.78x 2.33x 2.36x 1.90x
Including Interest on
Deposits.................. 1.97 1.78 1.34 1.62 1.56 1.26
</TABLE>
- ------------------------
For purposes of computing the consolidated ratios, earnings consist of
income before income taxes plus fixed charges (excluding capitalized interest).
Fixed charges consist of interest on short-term debt and long-term debt
(including interest related to capitized leases and capitalized interest) and
one-third of rent expense, which approximates the interest component of such
expense. In addition, where indicated, fixed charges include interest on
deposits.
USE OF PROCEEDS
THIS SECTION REPLACES THE SECTION ENTITLED "USE OF PROCEEDS" IN THE
ACCOMPANYING PROSPECTUS.
The net proceeds from the sale of the Subordinated Debentures are estimated
to be approximately $491 million, after deduction of the underwriting discount
and estimated offering expenses. Fleet intends to use the net proceeds for
general corporate purposes, principally to extend credit to, or fund investments
in, its subsidiaries. The precise amounts and timing of extensions of credit to,
and investments in, such subsidiaries will depend upon the subsidiaries' funding
requirements and the availability of other funds. Pending such applications, the
net proceeds may be temporarily invested in marketable securities or applied to
the reduction of Fleet's short-term indebtedness. Based upon the historic and
anticipated future growth of Fleet and the financial needs of its subsidiaries,
Fleet may engage in additional financing of a character and amount to be
determined as the need arises.
S-7
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following unaudited consolidated summary sets forth selected financial
data for Fleet and its subsidiaries for the nine months ended September 30, 1997
and 1996 and for each of the years in the five-year period ending December 31,
1996. The following summary should be read in conjunction with the financial
information incorporated herein by reference to other documents. See
"Incorporation of Certain Documents by Reference". The summary for the nine
months ended September 30, 1997 and 1996 is based on unaudited financial
statements which include all adjustments that, in the opinion of management of
Fleet, are necessary for a fair presentation of the results of the respective
interim periods. The results of operations for the nine months ended September
30, 1997 are not necessarily indicative of the results expected for 1997 or any
other interim period. Certain amounts in prior periods have been reclassified to
conform to current-year presentation.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------------------------- ----------------------------------------------------------
1997 1996 1996 1995 1994
---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<CAPTION>
CONSOLIDATED SUMMARY
OF OPERATIONS:
<S> <C> <C> <C> <C> <C>
Interest income
(fully taxable
equivalent)....... $ 4,393 $ 4,379 $ 5,878 $ 6,069 $ 5,260
Interest expense.... 1,649 1,850 2,439 3,005 2,161
Net interest
income............ 2,744 2,529 3,439 3,064 3,099
Provision for credit
losses............ 233 148 213 101 65
Net interest income
after provision
for credit
losses............ 2,511 2,381 3,226 2,963 3,034
Noninterest
income............ 1,730 1,484 2,013 1,665 1,468
Noninterest
expense........... 2,584 2,416 3,272 3,550 3,070
Net income.......... 968 836 1,139 (610a) 849
EARNINGS PER COMMON
SHARE:
Fully diluted....... $ 3.48 $ 2.91 $ 3.95 $ 1.57(a) $ 3.09
Weighted average
fully diluted
shares
outstanding....... 264,022,822 269,259,878 270,393,996 265,886,363 264,828,469
Book value per
common share...... $ 25.42 $ 23.90 $ 24.66 $ 22.71 $ 20.68
Cash dividends
declared per
common share...... 1.35 1.29 1.74 1.63 1.40
Common dividend
payout ratios..... 37.3% 43.3% 42.8% 90.4% 36.8%
RATIO OF EARNINGS TO
FIXED CHARGES:
Excluding interest
on deposits....... 4.60x 3.41x 3.62x 1.78x 2.33x
Including interest
on deposits....... 1.97 1.75 1.78 1.34 1.62
RATIO OF EARNINGS TO
FIXED CHARGES AND
DIVIDENDS ON PREFERRED
STOCK:
Excluding interest
on deposits....... 4.04 3.11 3.26 1.74 2.27
Including interest
on deposits....... 1.92 1.72 1.74 1.33 1.61
CONSOLIDATED BALANCE
SHEET--
AVERAGE BALANCES:
Total assets........ $ 82,092 $ 82,220 $ 83,124 $ 82,727 $ 79,561
Securities held to
maturity(c)....... 1,138 980 1,045 7,736 8,787
Securities available
for sale(c)....... 7,395 10,836 10,287 12,779 16,923
Loans and leases,
net of unearned
income............ 58,593 55,004 56,074 51,043 44,102
Interest-bearing
deposits.......... 47,703 46,489 47,334 43,120 40,113
Short-term
borrowings........ 4,433 6,497 5,844 14,046 15,355
Long-term
debt/subordinated
notes
and debentures.... 4,698 5,669 5,486 6,581 5,383
Dual Convertible
Preferred Stock... -- -- -- -- --
Stockholders'
equity............ 7,115 6,905 7,021 6,545 5,782
CONSOLIDATED RATIOS:
Net interest margin
(fully taxable
equivalent)....... 5.21% 4.75% 4.81% 4.12% 4.30%
Return on average
assets............ 1.58 1.36 1.37 (.74a) 1.07
Return on average
common
stockholders'
equity............ 19.65(d) 17.34(d) 17.43(d) 9.32(a)(d) 15.66(d)
Average
stockholders'
equity to average
assets............ 8.67 8.40 8.45 7.91 7.27
Tier 1 risk-based
capital ratio..... 7.13 7.06 7.67 7.61 9.14
Total risk-based
capital ratio..... 10.79 10.82 11.36 11.29 12.92
Period-end reserve
for credit losses
to period-end
loans and leases,
net of unearned
income............ 2.42% 2.58% 2.53% 2.56% 3.25%
Net charge-offs to
average loans and
leases, net of
unearned income... .65 .60 .66 .59 .54
Period-end
nonperforming
assets to
period-end loans
and leases, net of
unearned income,
and other real
estate owned...... (.81e) 1.26(e) 1.23(e) (.97e) 1.65
<CAPTION>
1993 1992
---------------- ----------------
<S> <C> <C>
CONSOLIDATED SUMMARY
OF OPERATIONS:
<S> <C> <C>
Interest income
(fully taxable
equivalent)....... $ 5,086 $ 5,318
Interest expense.... 1,917 2,337
Net interest
income............ 3,169 2,981
Provision for credit
losses............ 327 728
Net interest income
after provision
for credit
losses............ 2,842 2,253
Noninterest
income............ 1,636 1,784
Noninterest
expense........... 3,332 3,366
Net income.......... (817b) (366b)
EARNINGS PER COMMON
SHARE:
Fully diluted....... $ 3.03(b) $ 1.40(b)
Weighted average
fully diluted
shares
outstanding....... 257,373,073 237,116,784
Book value per
common share...... $ 21.76 $ 17.65
Cash dividends
declared per
common share...... 1.025 .825
Common dividend
payout ratios..... 24.6% 31.5%
RATIO OF EARNINGS TO
FIXED CHARGES:
Excluding interest
on deposits....... 2.36x 1.90x
Including interest
on deposits....... 1.56 1.26
RATIO OF EARNINGS TO
FIXED CHARGES AND
DIVIDENDS ON PREFERRED
STOCK:
Excluding interest
on deposits....... 2.27 1.82
Including interest
on deposits....... 1.54 1.25
CONSOLIDATED BALANCE
SHEET--
AVERAGE BALANCES:
Total assets........ $ 75,286 $ 71,633
Securities held to
maturity(c)....... 7,735 4,300
Securities available
for sale(c)....... 14,140 14,061
Loans and leases,
net of unearned
income............ 43,283 43,029
Interest-bearing
deposits.......... 39,766 42,031
Short-term
borrowings........ 12,807 8,848
Long-term
debt/subordinated
notes
and debentures.... 5,039 4,116
Dual Convertible
Preferred Stock... -- 283
Stockholders'
equity............ 5,311 4,118
CONSOLIDATED RATIOS:
Net interest margin
(fully taxable
equivalent)....... 4.63% 4.57%
Return on average
assets............ 1.09(b) (.51b)
Return on average
common
stockholders'
equity............ 17.11(b) 9.12(b)
Average
stockholders'
equity to average
assets............ 7.05 6.14
Tier 1 risk-based
capital ratio..... 10.44 9.89
Total risk-based
capital ratio..... 14.89 14.61
Period-end reserve
for credit losses
to period-end
loans and leases,
net of unearned
income............ 3.82% 4.43%
Net charge-offs to
average loans and
leases, net of
unearned income... 1.35 2.15
Period-end
nonperforming
assets to
period-end loans
and leases, net of
unearned income,
and other real
estate owned...... 2.35 4.53
</TABLE>
S-8
<PAGE>
- ------------------------
(a) Includes impact of the loss on assets held for sale or accelerated
disposition ($175 million pre-tax) and merger-related charges ($490 million
pre-tax) recorded in 1995. Excluding these special charges, return on
average common stockholders' equity and return on average assets would have
been 16.29% and 1.26%, respectively, while net income and earnings per share
would have been $1,039 million and $3.77, respectively.
(b) Includes impact of cumulative effect of change in accounting method of $53
million in 1993 and extraordinary credit of $18 million in 1992.
(c) For a discussion of Fleet's reclassification in 1992 of its "securities held
to maturity" to "securities available for sale", see Fleet's Current Report
on Form 8-K dated October 21, 1992. Effective January 1, 1994, Fleet adopted
FASB Statement No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." The standard requires that securities available for sale
be reported at fair value, with unrealized gains or losses reflected as a
separate component of stockholders' equity. In connection with the adoption
of FASB Statement No. 115, Fleet transferred securities netting to $345
million from the held to maturity portfolio to the available for sale
portfolio. During the fourth quarter of 1995, Fleet reclassified
substantially all of its securities held to maturity to securities available
for sale as the FASB permitted a one-time opportunity for institutions to
reassess the appropriateness of the designations of all securities.
(d) Fleet's return on average common stockholders' equity includes the average
unrealized gains and losses on securities available for sale. Excluding the
impact of FASB Statement No. 115, Fleet's return on average common
stockholders' equity would have been 19.72%, 17.29%, 17.42%, 9.25% and
15.35%, respectively, for the nine months ended September 30, 1997 and 1996
and the years ended December 31, 1996, 1995 and 1994.
(e) Excludes $172 million, $287 million, $265 million and $317 million of
nonperforming assets reclassified to held for sale or accelerated
disposition at September 30, 1997, September 30, 1996, December 31, 1996 and
December 31, 1995, respectively. Including such amounts, the ratios would
have been 1.10%, 1.74%, 1.68% and 1.58% at September 30, 1997, September 30,
1996, December 31, 1996 and December 31, 1995, respectively.
S-9
<PAGE>
DESCRIPTION OF SUBORDINATED DEBENTURES
THE FOLLOWING DESCRIPTION OF THE SUBORDINATED DEBENTURES OFFERED HEREBY
(REFERRED TO HEREIN AS THE "SUBORDINATED DEBENTURES" AND IN THE ACCOMPANYING
PROSPECTUS AS THE "SUBORDINATED DEBT SECURITIES") SUPPLEMENTS, AND TO THE EXTENT
INCONSISTENT THEREWITH REPLACES, THE DESCRIPTION OF THE GENERAL TERMS AND
PROVISIONS OF THE SUBORDINATED DEBT SECURITIES SET FORTH IN THE ACCOMPANYING
PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE.
GENERAL
The Subordinated Debentures will be issued under an indenture dated as of
October 1, 1992, between Fleet and The First National Bank of Chicago, as
Trustee (as supplemented by a First Supplemental Indenture dated November 30,
1992, the "Indenture"). The Subordinated Debentures will be limited to $500
million aggregate principal amount and will mature on January 15, 2028. Interest
on the Subordinated Debentures will be payable at the rate per annum shown on
the cover page of this Prospectus Supplement from January 15, 1998, or from the
most recent Interest Payment Date to which interest has been paid or provided
for, semi-annually on January 15 and July 15 of each year, beginning on July 15,
1998 to the persons in whose names the Subordinated Debentures are registered at
the close of business on January 1 and July 1 of each year next preceding such
Interest Payment Date. The Subordinated Debentures may not be redeemed prior to
maturity.
BOOK-ENTRY, DELIVERY AND FORM
The Subordinated Debentures will be issued in the form of fully registered
Global Securities. The Global Securities will be deposited with, or on behalf
of, the Depository and registered in the name of the Depository's nominee. The
Depository currently limits the maximum denomination of any global security to
$200,000,000. Therefore, for purposes of this Prospectus Supplement, "Global
Security" refers to the Global Securities representing the entire issue of
Subordinated Debentures offered hereby.
The Depository has advised as follows: The Depository is a limited-purpose
trust company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. The Depository holds securities that its
participants ("Participants") deposit with the Depository. The Depository also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers (including the Underwriters named in this
Prospectus Supplement), banks, trust companies, clearing corporations and
certain other organizations. The Depository is owned by a number of its direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the Depository's system is also available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("indirect
participants"). Persons who are not Participants may own beneficial interests in
securities held by the Depository only through Participants or indirect
participants. The Rules applicable to the Depository and its Participants are on
file with the Commission.
The Depository has advised that pursuant to procedures established by it (i)
upon issuance of the Global Security by Fleet, the Depository will credit the
accounts of the Participants designated by the Underwriters with the principal
amount of the Subordinated Debentures purchased by the Underwriters and (ii)
ownership of beneficial interests in the Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depository (with respect to Participants' interests), the Participants
and the indirect participants (with respect to the owners of beneficial
S-10
<PAGE>
interests in such Global Security). The laws of some states may require that
certain persons take physical delivery in definitive form of securities which
they own. Consequently, such persons may be prohibited from purchasing
beneficial interests in the Global Security from any beneficial owner or
otherwise.
So long as the Depository's nominee is the registered owner of the Global
Security, such nominee for all purposes will be considered the sole owner or
holder of the Subordinated Debentures represented by such Global Security for
all purposes under the Indenture. Except as provided below, owners of beneficial
interests in the Global Security will not be entitled to have any of the
Subordinated Debentures represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of the
Subordinated Debentures in definitive form and will not be considered the owners
or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in the Global Security must rely on the procedures of the
Depository and, if such person is not a Participant, on the procedures of the
Participant and, if applicable, the indirect participant, through which such
person owns its interest, to exercise any rights of a holder under the
Indenture. Fleet understands that under existing practice, in the event that
Fleet requests any action of the holders or a beneficial owner desires to take
any action a holder is entitled to take, the Depository would act upon the
instructions of, or authorize, the Participant to take such action.
Principal and interest payments on the Global Security registered in the
name of she Depository's nominee will be made to the Depository's nominee as the
registered owner of such Global Security. Fleet and the Trustee will treat the
person in whose name the Global Security is registered as the owner of such
Global Security for the purpose of receiving payment of principal and interest
on the Subordinated Debentures and for all other purposes whatsoever. None of
Fleet, the Trustee, the Paying Agent or the Security Registrar has any
responsibility or liability for the payment of principal or interest on the
Subordinated Debentures to owners of beneficial interests in the Global
Security. The Depository has advised that upon receipt of any payment of
principal or interest in respect of the Global Security, it will immediately
credit the accounts of the Participants with such payment in amounts
proportionate to their respective beneficial interests in such Global Security
as shown on the records of the Depository. Payments by Participants and indirect
participants to owners of beneficial interests in the Global Security will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the Participants or indirect
participants.
None of Fleet, the Trustee, the Paying Agent or the Security Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in the Global
Security, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Global Security representing all but not part of the Subordinated
Debentures being offered hereby is exchangeable for Subordinated Debentures in
definitive form of like tenor and terms if (i) the Depository notifies Fleet
that it is unwilling or unable to continue as depository for such Global
Security or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, a successor depository
is not appointed by Fleet within 90 days of receipt by Fleet of such notice or
of Fleet becoming aware of such ineligibility, (ii) Fleet in its discretion at
any time determines not to have all of the Subordinated Debentures represented
by the Global Security and notifies the Trustee thereof, or (iii) an Event of
Default has occurred and is continuing with respect to the Subordinated
Debentures. The Global Security exchangeable pursuant to the preceding sentence
shall be exchangeable for Subordinated Debentures issuable in authorized
denominations and registered in such names as the Depository holding such Global
Security shall direct. Subject to the foregoing, a Global Security is not
exchangeable, except for a Subordinated Debenture or Subordinated Debentures of
the same aggregate denomination to be registered in the name of the depository
or its nominee or in the name of a successor of the Depository or a nominee of
such successor.
S-11
<PAGE>
A further description of the Depository's procedures with respect to the
Global Security representing the Subordinated Debentures is set forth in the
Prospectus under "Description of Debt Securities--Global Securities". The
Depository has confirmed that it intends to follow such procedures.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Subordinated Debentures will be made by the Underwriters
in immediately available funds. All payments of principal and interest will be
made by Fleet in immediately available funds, so long as the Depository
continues to make its Same-Day Funds Settlement System available to Fleet.
Secondary trading in long-term debentures and debentures of corporate
issuers is generally settled in clearinghouse or next day funds. In contrast,
the Subordinated Debentures will trade in the Depository's Same-Day Funds
Settlement System until maturity, and secondary market trading activity in the
Subordinated Debentures will therefore be required by the Depository to settle
in immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Subordinated Debentures.
S-12
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated January 12, 1998 (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), have severally but not jointly
agreed to purchase from Fleet the following respective principal amounts of the
Subordinated Debentures:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Credit Suisse First Boston Corporation........................................ $ 100,000,000
Chase Securities Inc.......................................................... 100,000,000
Goldman, Sachs & Co........................................................... 100,000,000
J.P. Morgan Securities Inc.................................................... 100,000,000
Salomon Brothers Inc.......................................................... 100,000,000
--------------
Total..................................................................... $ 500,000,000
--------------
--------------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all the Subordinated Debentures, if any are purchased. The
Underwriting Agreement provides that, in the event of a default by an
Underwriter, in certain circumstances the purchase commitments of non-defaulting
Underwriters may be increased or the Underwriting Agreement may be terminated.
Fleet has been advised by the Underwriters that the Underwriters propose to
offer the Subordinated Debentures to the public initially at the public offering
price set forth on the cover page of this Prospectus Supplement and to certain
dealers at such price less a concession of .5% of the principal amount per
Subordinated Debenture and the Underwriters and such dealers may allow a
discount of .25% of such principal amount per Subordinated Debenture on sales to
certain other dealers. After the initial public offering, the public offering
price and concession and discount to dealers may be changed by the Underwriters.
The Subordinated Debentures are a new issue of securities with no
established trading market. The Underwriters have advised Fleet that they intend
to act as market makers for the Subordinated Debentures. However, the
Underwriters are not obligated to do so and may discontinue any market making at
any time without notice. No assurance can be given as to the liquidity of the
trading market for the Subordinated Debentures.
Fleet has agreed to indemnify the Underwriters against certain liabilities,
including civil liabilities under the Securities Act, or contribute to payments
which the Underwriters may be required to make in respect thereof.
Certain of the Underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including commercial and investment banking
services, for, Fleet and its subsidiaries in the ordinary course of business.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve purchases of the Subordinated Debentures
in the open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when the Subordinated Debentures
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
Subordinated Debentures to be higher than it would otherwise be in the absence
of such transactions.
S-13
<PAGE>
LEGAL MATTERS
THIS SECTION REPLACES THE SECTION ENTITLED "LEGAL MATTERS" IN THE
ACCOMPANYING PROSPECTUS.
Certain legal matters in connection with the Subordinated Debentures offered
hereby will be passed upon for Fleet by Edwards & Angell, Providence, Rhode
Island, and for the Underwriters by Cravath, Swaine & Moore, New York, New York.
V. Duncan Johnson, a partner of Edwards & Angell, is a director of Fleet
National Bank, a wholly owned subsidiary of Fleet, and beneficially owns 4,052
shares of Common Stock.
S-14
<PAGE>
PROSPECTUS
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
FLEET FINANCIAL GROUP, INC.
Fleet Financial Group, Inc., a Rhode Island corporation ("Fleet"), may offer
from time to time debt securities (the "Debt Securities"), which may be either
senior (the "Senior Debt Securities") or subordinated (the "Subordinated Debt
Securities") in priority of payment, and warrants to purchase Debt Securities
(the "Warrants"), having a public offering price of up to an aggregate of
$2,733,400,000 (or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a foreign currency unit, such as European
Currency Units ("ECU")). If Debt Securities are issued at original issue
discount, Fleet may issue such higher principal amount as may be sold for an
initial public offering price of up to $2,733,400,000 (less the dollar amount of
any securities previously issued hereunder), or the equivalent thereof in one or
more foreign currencies, foreign currency units, or composite currencies. The
Debt Securities and Warrants (collectively, the "Securities") may be offered
separately or as units with other securities, in separate series, in amounts and
at prices and terms to be set forth in an accompanying Prospectus Supplement (a
"Prospectus Supplement"). In addition, the Debt Securities may be convertible
into shares of Fleet's preferred stock (the "Preferred Stock"), depositary
shares representing Preferred Stock (the "Depositary Shares") or common stock
(the "Common Stock") on terms to be set forth in the accompanying Prospectus
Supplement. Pursuant to the terms of the Registration Statement of which this
Prospectus constitutes a part, Fleet may also offer and sell shares of its
Preferred Stock, which may be represented by Depositary Shares, shares of its
Common Stock or warrants to purchase Preferred Stock or Common Stock (the
"Equity Warrants"). Any such Preferred Stock, Depositary Shares, Common Stock or
Equity Warrants will be offered and issued pursuant to the terms of a separate
Prospectus contained in such Registration Statement. The aggregate amount of
Debt Securities and Warrants that may be offered and sold pursuant hereto is
subject to reduction as the result of the sale of any Preferred Stock,
Depositary Shares, Common Stock or Equity Warrants pursuant to such separate
Prospectus.
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the accompanying Prospectus Supplement,
together with the terms of the offering of the Securities and the initial price
and net proceeds to Fleet from the sale thereof. The Prospectus Supplement will
include, with regard to the particular Securities, the following information:
(i) in the case of Debt Securities, the specific designation, priority,
aggregate principal amount, denominations, currency or currency unit for which
Debt Securities may be purchased, currency or currency unit in which the
principal and any interest on Debt Securities is payable, location of the
offering, maturity, rate (which may be fixed or variable) and time of payment of
interest, if any, terms for redemption, if any, at the option of Fleet or the
holder, terms for sinking or purchase fund payments, if any, whether any Debt
Securities which are Subordinated Debt Securities will be subordinated to other
indebtedness of Fleet, the initial public offering price, if any, of the Debt
Securities, terms relating to temporary or permanent global securities, special
provisions relating to Debt Securities in bearer form, provisions regarding
registration of transfer or exchange, provisions relating to the payment of any
additional amounts, any conversion or exchange provisions and provisions
regarding original issue discount securities; (ii) in the case of Warrants, the
duration, offering price, exercise price and detachability of any such warrants;
and (iii) in the case of all Securities, whether such Securities will be offered
separately or as a unit with other securities. The Prospectus Supplement will
also contain information, where applicable, about certain United States federal
income tax considerations relating to, and any listing on a securities exchange
of, the Securities covered by the Prospectus Supplement.
Fleet may sell Securities to or through underwriters or dealers, and also
may sell Securities directly to other purchasers or through agents. See "Plan of
Distribution". If any agents or underwriters are involved in the sale of any of
the Securities, their names, any applicable fee, commission, purchase price or
discount arrangements with them will be set forth, or will be calculable from
the information set forth, in the Prospectus Supplement. Fleet may sell
Securities in an offering within the United States ("United States Offering") or
outside the United States ("International Offering").
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALE OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF
ANY BANK OR NONBANK SUBSIDIARY OF FLEET AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, BANK INSURANCE FUND OR ANY OTHER GOVERNMENT
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is October 24, 1997.
<PAGE>
AVAILABLE INFORMATION
Fleet is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning Fleet can be inspected and copied at the
Commission's office at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the Commission's Regional Offices in New York (Suite
1300, Seven World Trade Center, New York, New York 10048) and Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661), and copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates or by accessing the Commission's World Wide Web site
at http://www.sec.gov. The Common Stock is listed on the New York Stock
Exchange. Reports, proxy material and other information concerning Fleet also
may be inspected at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005. This Prospectus does not contain all the information
set forth in the Registration Statement and Exhibits thereto which Fleet has
filed with the Commission under the Securities Act of 1933, as amended (the
"Act"), which may be obtained from the Public Reference Section of the
Commission at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed fees, and to which reference is hereby
made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fleet are incorporated
in this Prospectus by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1996.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997.
3. Current Reports on Form 8-K dated January 15, 1997, February 4, 1997,
April 16, 1997, July 16, 1997 and October 15, 1997.
4. The description of the Common Stock contained in a Registration
Statement filed by Industrial National Corporation (predecessor to
Fleet) on Form 8-B dated May 29, 1970, and any amendment or report
filed for the purpose of updating such description.
5. The description of the Preferred Share Purchase Rights contained in
Fleet's Registration Statement on Form 8-A dated November 29, 1990,
and any amendment or report filed for the purpose of updating such
description.
Such incorporation by reference shall not be deemed to specifically
incorporate by reference the information referred to in Item 402(a)(8) of
Regulation S-K.
All documents filed with the Commission by Fleet pursuant to Sections 13, 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Securities offered hereby are
incorporated herein by reference and such documents shall be deemed to be a part
hereof from the date of filing of such documents. Any statement contained in
this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
ANY PERSON RECEIVING A COPY OF THIS PROSPECTUS MAY OBTAIN, WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OF THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN (OTHER THAN THE EXHIBITS TO SUCH DOCUMENTS). WRITTEN REQUESTS
SHOULD BE MAILED TO INVESTOR RELATIONS DEPARTMENT, FLEET FINANCIAL GROUP, INC.,
ONE FEDERAL STREET, BOSTON, MASSACHUSETTS 02110. TELEPHONE REQUESTS MAY BE
DIRECTED TO (617) 292-2000.
2
<PAGE>
FLEET FINANCIAL GROUP, INC.
GENERAL
Fleet is a diversified financial services company organized under the laws
of the State of Rhode Island. At June 30, 1997, Fleet was the 12th largest bank
holding company in the United States, with total assets of $83.4 billion, total
deposits of $63.2 billion and stockholders' equity of $7.1 billion.
Fleet is engaged in a general commercial banking and trust business
throughout the states of Connecticut, Massachusetts, New Jersey, New York, Rhode
Island, Maine, New Hampshire and Florida through its six banking subsidiaries,
and also provides, through its nonbanking subsidiaries and its credit card bank
subsidiary, a variety of financial services, including mortgage banking,
asset-based lending, consumer finance, real estate financing, securities
brokerage services, investment banking, investment advice and management, data
processing and student loan servicing.
The principal office of Fleet is located at One Federal Street, Boston,
Massachusetts 02110, telephone number (617) 292-2000.
REGULATORY MATTERS
GENERAL. Fleet is a legal entity separate and distinct from its
subsidiaries. The ability of holders of debt and equity securities of Fleet,
including the holders of the Securities offered hereby, to benefit from the
distribution of assets of any subsidiary upon the liquidation or reorganization
of such subsidiary is subordinate to prior claims of creditors of the subsidiary
(including depositors in the case of banking subsidiaries) except to the extent
that a claim of Fleet as a creditor may be recognized.
There are various statutory and regulatory limitations on the extent to
which banking subsidiaries of Fleet can finance or otherwise transfer funds to
Fleet or its nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases. Such transfers by any subsidiary bank
to Fleet or any nonbanking subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Fleet and all such nonbanking
subsidiaries, to an aggregate of 20% of each such bank's capital and surplus.
Furthermore, loans and extensions of credit are required to be secured in
specified amounts and are required to be on terms and conditions consistent with
safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Fleet from its banking subsidiaries. Under applicable
banking statutes, at June 30, 1997, Fleet's banking subsidiaries could have
declared additional dividends of approximately $246 million. Federal and state
regulatory agencies also have the authority to limit further Fleet's banking
subsidiaries' payment of dividends based on other factors, such as the
maintenance of adequate capital for such subsidiary bank.
Under the policy of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), Fleet is expected to act as a source of financial
strength to each subsidiary bank and to commit resources to support such
subsidiary bank in circumstances where it might not do so absent such policy. In
addition, any subordinated loans by Fleet to any of the subsidiary banks would
also be subordinate in right of payment to deposits and obligations to general
creditors of such subsidiary bank. Further, the Crime Control Act of 1990
amended the federal bankruptcy laws to provide that in the event of the
bankruptcy of Fleet, any commitment by Fleet to its regulators to maintain the
capital of a banking subsidiary will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
FIRREA.
As a result of the enactment of the Financial Institutions Reform, Recovery
and Enforcement Act ("FIRREA") on August 9, 1989, any or all of Fleet's
subsidiary banks can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989, in connection with
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(a) the default of any other of Fleet's subsidiary banks or (b) any assistance
provided by the FDIC to any other of Fleet's subsidiary banks in danger of
default. "Default" is defined generally as the appointment of a conservator or
receiver and "in danger of default" is defined generally as the existence of
certain conditions indicating that a "default" is likely to occur without
regulatory assistance.
FDICIA.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the
"FDICIA") provides for, among other things, increased funding for the Bank
Insurance Fund (the "BIF") of the FDIC and expanded regulation of depository
institutions and their affiliates, including parent holding companies. A summary
of certain provisions of FDICIA and its implementing regulations is provided
below.
PROMPT CORRECTIVE ACTION. The FDICIA provides the federal banking agencies
with broad powers to take prompt corrective action to resolve problems of
insured depository institutions, depending upon a particular institution's level
of capital. The FDICIA establishes five tiers of capital measurement for
regulatory purposes ranging from "well-capitalized" to "critically
undercapitalized." A depository institution may be deemed to be in a
capitalization category that is lower than is indicated by its actual capital
position under certain circumstances. At June 30, 1997, each of Fleet's
subsidiary depository institutions was classified as "well-capitalized" under
the prompt corrective action regulations described above.
BROKERED DEPOSITS. Under the FDICIA, a depository institution that is
well-capitalized may accept brokered deposits. A depository institution that is
adequately capitalized may accept brokered deposits only if it obtains a waiver
from the FDIC, and may not offer interest rates on deposits "significantly
higher" than the prevailing rate in its market. An undercapitalized depository
institution may not accept brokered deposits. In Fleet's opinion, these
limitations do not have a material effect on Fleet.
SAFETY AND SOUNDNESS STANDARDS. The FDICIA, as amended, directs each
federal banking agency to prescribe safety and soundness standards for
depository institutions relating to internal controls, information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, asset-quality, earnings and stock
valuation. Final interagency regulations to implement these new safety and
soundness standards were adopted by the federal banking agencies. As of October
1, 1996, standards for asset quality and earnings have been incorporated into
the Interagency Guidelines Establishing Standards for Safety and Soundness. The
three standards for Safety and Soundness established by the guidelines are (1)
operational and managerial; (2) compensation; and (3) asset quality, earnings
and stock valuation. The ultimate cumulative effect of these standards cannot
currently be forecast.
The FDICIA also contains a variety of other provisions that may affect
Fleet's operations, including new reporting requirements, regulatory standards
for real estate lending, "truth in savings" provisions, and the requirement that
a depository institution give 90 days' prior notice to customers and regulatory
authorities before closing any branch.
CAPITAL GUIDELINES
Under the Federal Reserve Board's capital guidelines, the minimum ratio of
total capital to risk-adjusted assets (including certain off-balance sheet
items, such as standby letters of credit) is 8%. At least half of the total
capital is to be comprised of common equity, retained earnings, minority
interests in the equity accounts of consolidated subsidiaries and a limited
amount of cumulative and noncumulative perpetual preferred stock, less
deductible intangibles ("Tier 1 capital"). The remainder may consist of
perpetual debt, mandatory convertible debt securities, a limited amount of
subordinated debt, other preferred stock and a limited amount of loan loss
reserves ("Tier 2 capital"). In addition, the Federal Reserve Board requires a
leverage ratio (Tier 1 capital to average quarterly assets, net of goodwill) of
3% for bank holding companies that meet certain specified criteria, including
that they have the highest
4
<PAGE>
regulatory rating. The rule indicates that the minimum leverage ratio should be
1% to 2% higher for holding companies undertaking major expansion programs or
that do not have the highest regulatory rating. Fleet's banking subsidiaries are
subject to similar capital requirements except that preferred stock must be
noncumulative to qualify as Tier 1 capital.
The federal banking agencies continue to consider capital requirements
applicable to banking organizations. Effective September 1, 1995, the federal
banking agencies adopted amendments to their risk-based capital regulations to
provide for the consideration of interest rate risk in the determination of a
bank's minimum capital requirements. The amendments require that banks
effectively measure and monitor their interest rate risk and that they maintain
capital adequate for that risk. Under the amendments, banks with excess interest
rate risk would be required to maintain additional capital beyond that generally
required. In addition, effective January 17, 1995, the federal banking agencies
adopted amendments to their risk-based capital standards to provide for the
concentration of credit risk and certain risks arising from nontraditional
activities, as well as a bank's ability to manage these risks, as important
factors in assessing a bank's overall capital adequacy. Effective January 1,
1997, with compliance by January 1, 1998, national banks with significant
exposure to market risk must maintain adequate capital to support that exposure.
The Office of the Comptroller of the Currency ("OCC") may apply this provision
to any national bank if the OCC deems it appropriate for safe and sound
practices.
As of June 30, 1997, Fleet's capital ratios on a historical basis exceeded
all minimum regulatory capital requirements.
Under federal banking laws, failure to meet the minimum regulatory capital
requirements could subject a banking institution to a variety of enforcement
remedies available to federal regulatory authorities, including the termination
of deposit insurance by the FDIC and seizure of the institution.
INTERSTATE BANKING AND BRANCHING LEGISLATION
On September 29, 1994, President Clinton signed the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 (the "Interstate Act") into law.
The Interstate Act facilitates the interstate expansion and consolidation of
banking organizations by permitting (i) beginning one year after enactment of
the legislation, bank holding companies that are adequately capitalized and
managed to acquire banks located in states outside their home states regardless
of whether such acquisitions are authorized under the law of the host state,
(ii) the interstate merger of banks after June 1, 1997, subject to the right of
individual states to "opt in" or "opt out" of this authority prior to such date,
(iii) banks to establish new branches on an interstate basis provided that such
action is specifically authorized by the law of the host state, (iv) foreign
banks to establish, with approval of the appropriate regulators in the United
States, branches outside their home states to the same extent that national or
state banks located in such state would be authorized to do so and (v) beginning
September 29, 1995, banks to receive deposits, renew time deposits, close loans,
service loans and receive payments on loans and other obligations as agent for
any bank or thrift affiliate, whether the affiliate is located in the same or
different state. In 1996, Fleet merged its banking subsidiaries in Connecticut,
Massachusetts and Rhode Island, and has recently filed applications to merge the
resulting bank with one of its banking subsidiaries in New York in order to
achieve cost savings and to increase convenience to its customers in those
states.
DEPOSIT INSURANCE ASSESSMENTS
The deposits of each of Fleet's subsidiary banks are insured up to
regulatory limits by the FDIC and, accordingly, are subject to deposit insurance
assessments to maintain the BIF administered by the FDIC. The FDIC has adopted
regulations establishing a permanent risk-related deposit insurance assessment
system. Under this system, the FDIC places each insured bank in one of nine risk
categories based on (a) the bank's capitalization and (b) supervisory
evaluations provided to the FDIC by the institution's primary federal regulator.
Each insured bank's insurance assessment rate is then determined by the risk
category in
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which it is classified by the FDIC. On November 14, 1995, the FDIC voted to
decrease premiums effective January 1, 1995. The decrease lowered the rate of
deposit insurance premiums by $.04 per $100 of deposits for banks in each risk
assessment category. As a result, banks in the highest capital and supervisory
evaluation categories have an assessment rate of $0.00, and pay only the minimum
assessment of $2,000 per year for deposit insurance. Banks in the lowest capital
and supervisory evaluation categories are subject to a rate of $0.27 per $100 of
deposits. The FDIC has indicated that it is maintaining the decreased rate
schedule for assessments paid to the BIF through the end of 1997. This will be
reviewed on a semi-annual basis. There is no guarantee that the rate of deposit
insurance premiums will not increase in the future.
These assessment rates also reflect the amount the FDIC has determined is
necessary to maintain the reserve ratio of BIF of 1.25% of total insured bank
deposits. The FDIC has announced that this reserve ratio was achieved during
1995. However, due primarily to the fact that the reserve ratio of the FDIC's
Savings Association Insurance Fund ("SAIF") is not projected to reach the
required level of 1.25% for several years, the FDIC has made a proposal to
Congress to (1) capitalize the SAIF through a special up-front cash assessment
on SAIF deposits; (2) spread the responsibility for payment to the Financing
Corporation created under Title III of the Competitive Equality Banking Act of
1987 proportionally over all FDIC-insured institutions; and (3) as soon as
practicable, merge the BIF and the SAIF. In May, 1997, the FDIC announced that
the BIF had a reserve ratio of 1.34% at the end of 1996. The FDIC projects the
reserve ratio to be within a range of 1.29 to 1.42 by the end of 1997. On May 6,
1997, the Board of Directors voted to retain the existing assessment rate
schedule applicable to members of the SAIF for the second half of 1997.
Fleet's subsidiary banks do not hold significant amounts of deposits insured
by the SAIF.
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CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Fleet's consolidated ratios of earnings to fixed charges were as follows for
the years and periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
QUARTER ENDED -----------------------------------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
--------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits...................... 4.77x 3.62x 1.78x 2.33x 2.36x 1.90x
Including Interest on Deposits...................... 2.01 1.78 1.34 1.62 1.56 1.26
</TABLE>
- ------------------------
For purposes of computing the consolidated ratios, earnings consist of
income before income taxes plus fixed charges (excluding capitalized interest).
Fixed charges consist of interest on short-term debt and long-term debt
(including interest related to capitalized leases and capitalized interest) and
one-third of rent expense, which approximates the interest component of such
expense. In addition, where indicated, fixed charges include interest on
deposits.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, Fleet
intends to use the net proceeds from the sale of the Securities for general
corporate purposes, principally to extend credit to, or fund investments in, its
subsidiaries. The precise amounts and timing of extensions of credit to, and
investments in, such subsidiaries will depend upon the subsidiaries' funding
requirements and the availability of other funds. Pending such applications, the
net proceeds may be temporarily invested in marketable securities or applied to
the reduction of Fleet's short-term indebtedness. Based upon the historic and
anticipated future growth of Fleet and the financial needs of its subsidiaries,
Fleet may engage in additional financings of a character and amount to be
determined as the need arises.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either Senior Debt Securities or
Subordinated Debt Securities of Fleet. The Senior Debt Securities will be issued
under an indenture dated as of October 1, 1992 (the "Senior Indenture"), between
Fleet and The First National Bank of Chicago as Senior Trustee (the "Senior
Trustee"). The Subordinated Debt Securities will be issued under an indenture
dated as of October 1, 1992 (as supplemented by a First Supplemental Indenture
dated November 30, 1992, the "Subordinated Indenture"), between Fleet and The
First National Bank of Chicago as Subordinated Trustee (the "Subordinated
Trustee"). The Senior Indenture and Subordinated Indenture are collectively
referred to herein as the "Indentures". A copy of each of the Indentures are
exhibits to the Registration Statement of which this Prospectus forms a part.
The following description of Debt Securities relates to Debt Securities to be
issued in connection with either a United States Offering or an International
Offering, except, in the case of an International Offering, as otherwise
specified in the Prospectus Supplement relating thereto.
The following is a summary of all material terms set forth in the
Indentures. Such summaries do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Indentures, including the definitions therein of certain terms. Wherever
particular Sections or defined terms of the Indentures are referred to, it is
intended that such Sections or definitions shall be incorporated herein by
reference. The following sets forth certain general terms and provisions of the
Debt Securities to which any Prospectus Supplement may relate. The particular
terms of the Debt Securities offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered, will be described in the Prospectus Supplement relating
to such Offered Securities.
Because Fleet is a holding company, its rights and the rights of its
creditors, including the Holders of the Debt Securities offered hereby, to
participate in the assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to the prior claims of the subsidiary's creditors
except to the extent that Fleet may itself be a creditor with recognized claims
against the subsidiary.
GENERAL
The Debt Securities to be offered by this Prospectus are limited to the
amounts described on the cover of this Prospectus. Fleet expects from time to
time to incur additional indebtedness constituting Senior Indebtedness and Other
Financial Obligations (each as defined in the Subordinated Indenture). The
Indentures, however, do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured obligations of Fleet. Neither the Indentures nor the Debt Securities
will limit or otherwise restrict the amount of other indebtedness (including
Other Financial Obligations) which may be incurred or other securities which may
be issued by Fleet or any of its subsidiaries. The Senior Debt Securities will
rank on a parity with all other unsecured unsubordinated indebtedness of Fleet
while the indebtedness represented by the Subordinated Debt Securities will be
subordinated as described below under "Subordinated Debt Securities".
As used herein, Debt Securities shall include securities denominated in U.S.
dollars or, at the option of Fleet if so specified in the applicable Prospectus
Supplement, in any other currency, including composite currencies such as the
ECU. Debt Securities of a series may be issuable in individual registered form
without coupons, in the form of one or more global securities, or, in bearer
form with or without coupons. Such bearer securities will be offered only to
non-United States persons and to offices located outside of the United States of
certain United States financial institutions.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms, where
applicable, of the Debt Securities in respect of which this Prospectus is being
delivered: (1) the title of the Debt Securities; (2) the limit, if any, on the
aggregate
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<PAGE>
principal amount or initial public offering price of the Debt Securities; (3)
the priority of payment of such Debt Securities; (4) the price or prices (which
may be expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (5) the date or dates on which the
Debt Securities will mature; (6) the rate or rates (which may be fixed or
variable) per annum at which the Debt Securities will bear interest, if any, or
the method of determining the same; (7) the date from which such interest, if
any, on the Debt Securities will accrue, the date or dates on which such
interest, if any, will be payable, the date on which payment of such interest,
if any, will commence and the Regular Record Dates for such Interest Payment
Dates, if any; (8) the extent to which any of the Debt Securities will be
issuable in temporary or permanent global form and, if so, the identity of the
depositary for such global Debt Security, or the manner in which any interest
payable on a temporary or permanent global Debt Security will be paid; (9) the
dates, if any, on which, and the price or prices at which, the Debt Securities
will, pursuant to any mandatory sinking fund provisions, or may, pursuant to any
optional sinking fund or to any purchase fund provisions, be redeemed by Fleet,
and the other detailed terms and provisions of such sinking and/or purchase
funds; (10) the date, if any, after which, and the price or prices at which, the
Debt Securities may, pursuant to any optional redemption provisions, be redeemed
at the option of Fleet or of the Holder thereof and the other detailed terms and
provisions of such optional redemption; (11) the denomination or denominations
in which such Debt Securities are authorized to be issued; (12) the currency,
currencies or units (including ECU) in which the Debt Securities are
denominated, which may be in United States dollars, a foreign currency or units
of two or more foreign currencies; (13) the currency, currencies or units
(including ECU) for which the Debt Securities may be purchased and in which
principal, premium, if any, and interest may be payable; (14) whether any of the
Debt Securities will be issued in bearer form and, if so, any limitations on
issuance of such bearer Debt Securities (including exchange for registered Debt
Securities of the same series); (15) information with respect to book-entry
procedures; (16) whether any of the Debt Securities will be issued as Original
Issue Discount Securities; (17) any index used to determine the amount of
payments of principal of, premium, if any, and interest on such Debt Securities;
(18) each office or agency where, subject to the terms of the applicable
Indenture, such Debt Securities may be presented for registration of transfer or
exchange; (19) whether any of the Debt Securities will be subject to defeasance
in advance of the Redemption Date or Stated Maturity thereof; (20) whether the
subordination provisions summarized below or different subordination provisions,
including a different definition of "Senior Indebtedness", "Entitled Persons",
"Existing Subordinated Indebtedness", or "Other Financial Obligations", shall
apply to the Debt Securities; (21) whether any of the Debt Securities will be
convertible or exchangeable into other securities of Fleet and the terms of such
conversion or exchange, including the conversion price and applicable conversion
or expiration dates and (22) any other terms of the series (which will not be
inconsistent with the provisions of the applicable Indenture).
Special federal income tax and other considerations relating to Debt
Securities denominated in foreign currencies or units of two or more foreign
currencies will be described in the applicable Prospectus Supplement. In the
event Fleet offers Debt Securities denominated in foreign currencies or units of
two or more foreign currencies, an opinion with respect to tax matters and
consent of counsel will be filed in a Form 8-K or as an amendment to the
Registration Statement of which this Prospectus forms a part.
Debt Securities may be issued as Original Issue Discount Securities (bearing
no interest or interest at a rate which at the time of issuance is below market
rates) to be sold at a substantial discount below their principal amount. In the
event of an acceleration of the maturity of any Original Issue Discount
Security, the amount payable to the Holder of such Original Issue Discount
Security upon such acceleration will be determined in accordance with the
applicable Prospectus Supplement, the terms of such security and the relevant
Indenture, but will be an amount less than the amount payable at the maturity of
the principal of such Original Issue Discount Security. Special federal income
tax and other considerations relating thereto will be described in the
applicable Prospectus Supplement.
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<PAGE>
REGISTRATION AND TRANSFER
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indentures, however, provide that Fleet may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Debt
Securities issued in bearer form shall have interest coupons attached, unless
issued as zero coupon securities. Debt Securities in bearer form shall not be
offered, sold, resold or delivered in connection with their original issuance in
the United States or to any United States person (as defined below) other than
offices located outside the United States of certain United States financial
institutions. As used above, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States, or any estate or
trust, the income of which is subject to United States federal income taxation
regardless of its source, and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction. Purchasers of Debt
Securities in bearer form will be subject to certification procedures and may be
affected by certain limitations under United States tax laws. Such procedures
and limitations will be described in the Prospectus Supplement relating to the
offering of the Debt Securities in bearer form.
Debt Securities in registered form may be presented for transfer or exchange
(with form of transfer duly endorsed thereon) for other Debt Securities of the
same series at the offices of the Trustee according to the terms of the
applicable Indenture. In no event, however, will Debt Securities in registered
form be exchangeable for Debt Securities in bearer form. Fleet may designate the
office of the Trustee, who will also be the transfer agent of the Debt
Securities, as an office where the transfer of the Debt Securities may be
registered.
Unless otherwise indicated in the applicable Prospectus Supplement, Debt
Securities issued in bearer form will be issued in denominations of $10,000 and
$50,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities issued in fully registered form will be issued without coupons and in
denominations of $1,000 or integral multiples thereof.
No service charge will be made for any transfer or exchange of the Debt
Securities but Fleet may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
PAYMENT AND PLACE OF PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on, Debt Securities in
registered form will be made at the office of the Trustee, except that at the
option of Fleet, interest may be paid by mailing a check to the address of the
person entitled thereto as it appears on the Security Register (Sections 301,
305 and 1002 in the Senior Indenture; Sections 3.01, 3.05 and 5.02 in the
Subordinated Indenture).
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of, premium, if any, and interest, if any, on Debt Securities in
bearer form will be made, subject to any applicable laws and regulations, at
such office outside the United States as specified in the applicable Prospectus
Supplement and as Fleet may designate from time to time, at the option of the
Holder, by check or by transfer to an account maintained by the payee with a
bank located outside the United States. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on Debt Securities in
bearer form will be made only against surrender of the coupon relating to such
Interest Payment Date. No payment with respect to any Debt Security in bearer
form will be made at any office or agency of Fleet in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States.
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<PAGE>
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the Prospectus Supplement relating to such series. Global Securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing Debt Securities in definitive form represented thereby,
a Global Security may not be transferred except as a whole by the Depository for
such Global Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor of such Depository or a nominee of
such successor.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series.
MODIFICATION AND WAIVER
Each Indenture provides that modifications and amendments thereof may be
made by Fleet and the Trustees with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Securities of each series under
such Indenture affected by such modification or amendment; provided, however,
that no such modification or amendment may, without the consent of the Holder of
each Outstanding Security affected thereby, (a) change the stated maturity date
of the principal of, or any installment of principal or interest on, any
Outstanding Security, (b) reduce the principal amount of, the rate of interest
thereon, or any premium payable upon the redemption thereof, (c) reduce the
amount of principal of an Original Issue Discount Security payable upon
acceleration of the maturity thereof, (d) change the place or currency of
payment of principal of, or any premium or interest on, any Outstanding
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Outstanding Security, or (f) reduce the
percentage in principal amount of Outstanding Securities of any series, the
consent of whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults.
The Holders of 50% in aggregate principal amount of the Outstanding
Securities of each series may, on behalf of all Holders of Debt Securities of
that series, waive, insofar as that series is concerned, compliance by Fleet
with certain restrictive provisions of the applicable Indenture. The Holders of
a majority in aggregate principal amount of the Outstanding Securities of each
series may, on behalf of all Holders of Debt Securities of that series, waive
any past default under the applicable Indenture with respect to Debt Securities
of that series, except a default in the payment of principal or any premium or
any interest or in respect of a provision which under the applicable Indenture
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of that series affected.
Modification and amendment of the Indentures may be made by Fleet and the
Trustee without the consent of any Holder for any of the following purposes: (i)
to evidence the succession of another Person to Fleet; (ii) to add to the
covenants of Fleet for the benefit of the Holders of all or any series of
Securities; (iii) to add Events of Default; (iv) to add or change any provisions
of any of the Indentures to facilitate the issuance of bearer securities; (v) to
change or eliminate any of the provisions of the applicable Indenture, provided
that any such change or elimination shall become effective only when there is no
Outstanding Security of any series which is entitled to the benefit of such
provision; (vi) to establish the form or terms of Securities of any series;
(vii) to evidence and provide for the acceptance of appointment by a successor
Trustee; (viii) to cure any ambiguity, to correct or supplement any provision in
the applicable Indenture, or to make any other provisions with respect to
matters or questions arising under such Indenture, provided such action shall
not adversely affect the interests of Holders of Debt Securities of any series
in any material respect under such Indenture; (ix) to convey, transfer, assign,
mortgage or pledge any property to
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or with the Trustee or (x) to provide for conversion rights of the Holders of
the Securities of any series to enable such Holders to convert such Securities
into other securities of Fleet.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise set forth in the applicable Prospectus Supplement, each
Indenture provides that Fleet may consolidate or merge with or into, or transfer
its assets substantially as an entirety to, any corporation organized under the
laws of any domestic jurisdiction, provided that the successor corporation
assumes Fleet's obligations on the Debt Securities under such Indenture, and
that after giving effect to the transaction no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing, and that certain other conditions are met.
Neither Indenture provides for any right of acceleration in the event of a
consolidation, merger, sale of all or substantially all of the assets,
recapitalization or change in stock ownership of Fleet. In addition, the
Indentures do not contain any provision which would protect the Holders of Debt
Securities against a sudden and dramatic decline in credit quality resulting
from takeovers, recapitalizations or similar restructurings.
REGARDING THE TRUSTEE
Fleet maintains banking relations with the Trustee. In addition, Fleet's
banking subsidiaries maintain deposit accounts and correspondent banking
relations with the Trustee.
INTERNATIONAL OFFERING
If specified in the applicable Prospectus Supplement, Fleet may issue Debt
Securities in an International Offering. Such Debt Securities may be issued in
bearer form and will be described in the applicable Prospectus Supplement. If
such Debt Securities are Senior Debt Securities, such Debt Securities will be
issued pursuant to a supplement to the Senior Indenture. If Debt Securities are
issued in bearer form, the applicable Prospectus Supplement will contain the
relevant provisions.
In connection with any such International Offering, Fleet will designate
paying agents, registrars or other agents with respect to the Debt Securities,
as specified in the applicable Prospectus Supplement.
Debt Securities issued in an International Offering may be subject to
certain selling restrictions which will be described in the applicable
Prospectus Supplement. Such Debt Securities may be listed on one or more foreign
stock exchanges as described in the applicable Prospectus Supplement. Special
United States tax and other considerations, if any, applicable to an
International Offering will be described in the applicable Prospectus
Supplement.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be direct, unsecured obligations of Fleet
and will rank pari passu with all outstanding senior indebtedness of Fleet.
EVENTS OF DEFAULT
The following are Events of Default under the Senior Indenture with respect
to Senior Debt Securities of any series: (a) failure to pay principal of or any
premium on any Senior Debt Security of that series when due; (b) failure to pay
any interest on any Senior Debt Security of that series when due, continued for
30 days; (c) failure to deposit any sinking fund payment, when due, in respect
of any Senior Debt Security of that series; (d) failure to perform any other
covenant of Fleet in the Senior Indenture (other than any covenant included in
the Indenture solely for the benefit of a Series of Debt Securities other than
that Series), continued for 60 days after written notice as provided in the
Senior Indenture; (e) certain events in bankruptcy, insolvency or
reorganization; and (f) any other Event of Default provided
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with respect to Senior Debt Securities of that series. (Section 501) If an Event
of Default with respect to Senior Debt Securities of any series at the time
outstanding occurs and is continuing, either the Senior Trustee or the Holders
of at least 25% in aggregate principal amount of the Outstanding Securities of
that series may declare the principal amount (or, if the Senior Debt Securities
of that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Senior Debt Securities of that series to be due and payable immediately. At any
time after a declaration of acceleration with respect to Senior Debt Securities
of any series has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in aggregate principal
amount of Outstanding Securities of that series may, on behalf of all Holders of
that series, under certain circumstances, rescind and annul such acceleration.
(Section 502)
The Senior Indenture provides that, subject to the duty of the Senior
Trustee during default to act with the required standard of care, the Senior
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Senior Trustee reasonable
indemnity. (Section 603) Subject to such provisions for the indemnification of
the Senior Trustee, the Holders of a majority in aggregate principal amount of
the Outstanding Senior Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceedings for any remedy
available to the Senior Trustee, or exercising any trust or power conferred on
the Senior Trustee, with respect to the Senior Debt Securities of that series.
(Section 512)
No Holder of any Senior Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture or for any remedy
thereunder, unless (a) such Holder shall have previously given to the Senior
Trustee written notice of a continuing Event of Default with respect to Senior
Debt Securities of that series, (b) the Holders of not less than 25% in
aggregate principal amount of the Outstanding Senior Debt Securities of that
series also shall have made written request and offered reasonable indemnity to
the Senior Trustee to institute such proceeding as trustee, (c) the Senior
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Senior Debt Securities of that series a direction
inconsistent with such request and (d) the Senior Trustee shall have failed to
institute such proceeding within 60 days. (Section 507) However, the Holder of
any Senior Debt Security will have an absolute right to receive payment of the
principal of (and premium, if any) and interest, if any, on such Senior Debt
Security on or after the due dates expressed in such Senior Debt Security and to
institute suit for the enforcement of any such payment. (Section 508)
Fleet is required to furnish to the Senior Trustee annually a statement as
to performance by Fleet of certain of its obligations under the Indenture and as
to any default in such performance. (Section 1009)
RESTRICTIVE COVENANTS
DISPOSITION OF VOTING STOCK OF CERTAIN SUBSIDIARIES. The Senior Indenture
contains a covenant that Fleet will not, and will not permit any Subsidiary (as
defined in the Senior Indenture) to sell, assign, pledge, transfer or otherwise
dispose of, or permit the issuance of any shares of Voting Stock (as defined in
the Senior Indenture) of, or any securities convertible into, or options,
warrants or rights to subscribe for or purchase shares of Voting Stock of, a
Principal Constituent Bank (as defined below) or any Subsidiary which owns
shares of, or securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of Voting Stock of a Principal Constituent
Bank, provided that dispositions made by Fleet or any Subsidiary (i) acting in a
fiduciary capacity for any person other than Fleet or any Subsidiary or (ii) to
Fleet or any of its wholly-owned (except for directors' qualifying shares)
Subsidiaries, shall not be prohibited. Notwithstanding the limitations described
above, the Senior Indenture provides that Fleet may, and may permit its
Subsidiaries to, sell, assign, pledge, transfer or otherwise dispose of, or
issue such shares or securities (1) if required by law for the qualification of
Directors, (2) for purposes of compliance with an order of a court or regulatory
authority, (3) if in connection with a merger of, or consolidation of, a
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Principal Constituent Bank with or into a wholly-owned Subsidiary or a
Constituent Bank (as defined below), provided that Fleet holds, directly or
indirectly, in the entity surviving such merger or consolidation, not less than
the percentage of Voting Stock it held in the Principal Constituent Bank prior
to such action, (4) if such disposition or issuance is for fair market value
(determined by the Board of Directors of Fleet) and, if after giving effect to
such disposition or issuance (and any potential dilution), Fleet and its
wholly-owned Subsidiaries will own directly not less than 80% of the Voting
Stock of such Principal Constituent Bank or Subsidiary, (5) if a Principal
Constituent Bank sells additional shares of Voting Stock to its stockholders at
any price, if, after such sale, Fleet holds directly or indirectly not less than
the percentage of Voting Stock of such Principal Constituent Bank it owned prior
to such sale or (6) if Fleet or a Subsidiary pledges or creates a lien on the
Voting Stock of a Principal Constituent Bank to secure a loan or other extension
of credit by a Constituent Bank subject to Section 23A of the Federal Reserve
Act. A "Constituent Bank" is a Bank which is a Subsidiary. A "Principal
Constituent Bank" is Fleet National Bank and any other Constituent Bank
designated as a Principal Constituent Bank. Any designation of a Constituent
Bank as a Principal Constituent Bank with respect to Debt Securities of any
series shall remain effective until the Debt Securities of such series are no
longer outstanding. As of the date of this Prospectus, no Constituent Banks
(other than Fleet National Bank) have been designated as Principal Constituent
Banks with respect to any series of Debt Securities.
LIMITATION UPON LIENS ON CERTAIN CAPITAL STOCK. The Senior Indenture
contains a covenant that Fleet will not at any time, directly or indirectly,
create, assume, incur or suffer to be created, assumed or incurred or to exist
any mortgage, pledge, encumbrance or lien or charge of any kind upon (1) any
shares of capital stock of any Principal Constituent Bank (other than directors'
qualifying shares), or (2) any shares of capital stock of a Subsidiary which
owns capital stock of any Principal Constituent Bank; provided, however, that,
notwithstanding the foregoing, Fleet may incur or suffer to be incurred or to
exist upon such capital stock (a) liens for taxes, assessments or other
governmental charges or levies which are not yet due or are payable without
penalty or of which the amount, applicability or validity is being contested by
Fleet in good faith by appropriate proceedings and Fleet shall have set aside on
its books adequate reserves with respect thereto or (b) the lien of any
judgement, if such judgment shall not have remained undischarged, or unstayed on
appeal or otherwise, for more than 60 days.
DEFEASANCE
Fleet may terminate certain of its obligations under the Senior Indenture
with respect to the Senior Debt Securities of any series on the terms and
subject to the conditions contained in the Senior Indenture, by (a) depositing
irrevocably with the Senior Trustee as trust funds in trust (i) in the case of
Senior Debt Securities denominated in a foreign currency, money in such foreign
currency or Foreign Government Obligations (as defined below) of the foreign
government or governments issuing such foreign currency, or (ii) in the case of
Senior Debt Securities denominated in U.S. dollars, U.S. dollars or U.S.
Government Obligations (as defined below), in each case in an amount which
through the payment of interest, principal or premium, if any, in respect
thereof in accordance with their terms will provide (without any reinvestment of
such interest, principal or premium), not later than one business day before the
due date of any payment, money or (iii) a combination of money and U.S.
Government Obligations or Foreign Government Obligations, as applicable,
sufficient to pay the principal of or premium, if any, and interest on, the
Senior Debt Securities of such series as such are due and (b) satisfying certain
other conditions precedent specified in the Senior Indenture. Such deposit and
termination is conditioned among other things upon Fleet's delivery of (a) an
opinion of independent counsel that the Holders of the Senior Debt Securities of
such series will have no federal income tax consequences as a result of such
deposit and termination and (b) if the Senior Debt Securities of such series are
then listed on the New York Stock Exchange, an opinion of counsel that the
Senior Debt Securities of such series will not be delisted as a result of the
exercise of this option. Such termination will not relieve Fleet of its
obligation to pay when due the principal of, and interest on, certain of the
Senior Debt Securities as provided in the Indenture. (Section 403)
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<PAGE>
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof. "Foreign Government Obligations" means securities denominated in a
Foreign Currency that are (i) direct obligations of a foreign government for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
a foreign government the payment of which is unconditionally guaranteed as a
full faith and credit obligation by such foreign government, which, in either
case, under clauses (i) or (ii) are not callable or redeemable at the option of
the issuer thereof.
SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be direct, unsecured obligations of
Fleet and, unless otherwise specified in the applicable Prospectus Supplement,
will rank pari passu with all outstanding subordinated indebtedness of Fleet.
SUBORDINATION
The payment of the principal of and interest on the Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (as defined in the Subordinated Indenture). In certain events of
insolvency, the payment of the principal of and interest on the Subordinated
Debt Securities will, to the extent set forth in the Subordinated Indenture,
also be effectively subordinated in right of payment to the prior payment in
full of all Other Financial Obligations (as defined in the Subordinated
Indenture). Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshalling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will first be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Subordinated Debt Securities will be entitled to
receive any payment in respect of the principal of or interest on the
Subordinated Debt Securities. If upon any such payment or distribution of assets
to creditors, there remain, after giving effect to such subordination provisions
in favor of the holders of Senior Indebtedness, any amounts of cash, property or
securities available for payment or distribution in respect of Subordinated Debt
Securities (as defined in the Subordinated Indenture, "Excess Proceeds") and if,
at such time, any Entitled Persons (as defined in the Subordinated Indenture) in
respect of Other Financial Obligations have not received payment in full of all
amounts due or to become due on or in respect of such Other Financial
Obligations, then such Excess Proceeds shall first be applied to pay or provide
for the payment in full of such Other Financial Obligations before any payment
or distribution may be made in respect of the Subordinated Debt Securities. In
the event of the acceleration of the maturity of any Debt Securities, the
holders of all Senior Indebtedness will first be entitled to receive payment in
full of all amounts due thereon before the Holders of the Subordinated Debt
Securities will be entitled to receive any payment upon the principal of or
interest on the Subordinated Debt Securities.
In addition, no payment may be made of the principal of, premium, if any, or
interest on the Subordinated Debt Securities, or in respect of any redemption,
retirement, purchase or other acquisition of any of the Subordinated Debt
Securities, at any time when (i) there is a default in the payment of the
principal of, premium, if any, interest on or otherwise in respect of any Senior
Indebtedness, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, or (ii) any event of default with respect to any
Senior Indebtedness has occurred and is continuing, or would occur as a result
of such
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<PAGE>
payment on the Subordinated Debt Securities or any redemption, retirement,
purchase or other acquisition of any of the Subordinated Debt Securities,
permitting the Holders of such Senior Indebtedness (or a trustee on behalf of
the Holders thereof) to accelerate the maturity thereof.
By reason of such subordination in favor of the holders of Senior
Indebtedness, in the event of insolvency, creditors of Fleet who are not holders
of Senior Indebtedness or of the Subordinated Debt Securities may recover less,
ratably, than Holders of Senior Indebtedness and may recover more, ratably, than
the Holders of the Subordinated Debt Securities. By reason of the obligation of
the Holders of Subordinated Debt Securities to pay over any Excess Proceeds to
Entitled Persons in respect of Other Financial Obligations, in the event of
insolvency, holders of Existing Subordinated Indebtedness (as defined in the
Subordinated Indenture) may recover more, ratably, than the Holders of
Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Senior
Indebtedness is defined in the Subordinated Indenture as (a) the principal of,
premium, if any, and interest on all of Fleet's indebtedness for money borrowed,
whether outstanding on the date of execution of the Subordinated Indenture or
thereafter created, assumed or incurred, except (i) the Existing Subordinated
Indebtedness and other Subordinated Debt Securities issued under the
Subordinated Indenture, (ii) such indebtedness as is by its terms expressly
stated to be junior in right of payment to the Subordinated Debt Securities and
(iii) such indebtedness as is by its terms expressly stated to rank pari passu
with the Subordinated Debt Securities and (b) any deferrals, renewals or
extensions of any such Senior Indebtedness. (Section 1.01). The Term
"indebtedness for money borrowed" when used with respect to Fleet is defined to
include, without limitation, any obligation of, or any obligation guaranteed by,
Fleet for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation of,
or any such obligation guaranteed by, Fleet for the payment of the purchase
price of property or assets. (Section 1.01).
As of the date of this Prospectus, Fleet had an aggregate of $2,049,000,000
in Subordinated Debt outstanding, of which $934,000,000 is subordinated to
Fleet's Senior Indebtedness and $1,115,000,000 is subordinated to Fleet's Senior
Indebtedness and Other Financial Obligations.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Other
Financial Obligations means all obligations of Fleet to make payment pursuant to
the terms of financial instruments, such as (i) securities contracts and foreign
currency exchange contracts, (ii) derivative instruments, such as swap
agreements (including interest rate and foreign exchange rate swap agreements),
cap agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange rate agreements, options, commodity futures contracts,
commodity option contracts and (iii) in the case of both (i) and (ii) above,
similar financial instruments, other than (A) obligations on account of Senior
Indebtedness and (B) obligations on account of indebtedness for money borrowed
ranking pari passu with or subordinate to the Subordinated Debt Securities.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Subordinated Debt Securities offered thereby, Entitled
Persons means any person who is entitled to payment pursuant to the terms of
Other Financial Obligations.
Any Prospectus Supplement relating to a particular series of Subordinated
Debt Securities will set forth the aggregate amount of indebtedness of Fleet
senior to the Subordinated Debt Securities as of a recent practicable date.
Fleet's obligations under the Subordinated Debt Securities shall rank pari
passu in right of payment with each other and with the Existing Subordinated
Indebtedness, subject to the obligations of the Holders of Subordinated Debt
Securities to pay over any Excess Proceeds to Entitled Persons in respect of
Other Financial Obligations as provided in the Subordinated Indenture.
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<PAGE>
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness or Other Financial Obligations, which may include
indebtedness that is senior to the Subordinated Debt Securities, but subordinate
to other obligations of Fleet.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
Except as described above or in the Subordinated Indenture, the obligation
of Fleet to make payment of the principal of, premium, if any, or interest on
the Subordinated Debt Securities will not be affected by reason of such
subordination. In the event of a distribution of assets upon any dissolution,
winding up, liquidation or reorganization, certain general creditors of Fleet
may recover more, ratably, than Holders of the Subordinated Debt Securities.
Subject to payment in full of all Senior Indebtedness, the rights of the Holders
of Subordinated Debt Securities will be subrogated to the rights of the Holders
of Senior Indebtedness to receive payments or distribution of cash, property or
securities of Fleet applicable to Senior Indebtedness. Subject to the payment in
full of all Other Financial Obligations, the rights of the Holders of
Subordinated Debt Securities will be subrogated to the rights of Entitled
Persons to receive payments or distributions of cash, property or securities of
Fleet applicable to Other Financial Obligations. (Sections 14.02 and 14.10)
LIMITED RIGHTS OF ACCELERATION
Unless otherwise specified in the Prospectus Supplement relating to any
series of Subordinated Debt Securities, payment of principal of the Subordinated
Debt Securities may be accelerated only in case of certain events involving the
bankruptcy, insolvency or reorganization of Fleet which constitutes an Event of
Default (as defined below). There is no right of acceleration in the case of a
default in the payment of principal of, premium, if any, or interest on the
Subordinated Debt Securities or the performance of any other covenant of Fleet
in the Subordinated Indenture.
RESTRICTIVE COVENANTS
The Prospectus Supplement relating to a series of Subordinated Debt
Securities may describe certain restrictive covenants, if any, to which Fleet
may be bound under the Subordinated Indenture.
EVENTS OF DEFAULT, DEFAULTS, WAIVERS
An "Event of Default" with respect to Subordinated Debt Securities of any
series is defined in the Subordinated Indenture as certain events involving the
bankruptcy or reorganization of Fleet and any other Event of Default provided
with respect to Subordinated Debt Securities of such series. (Section 7.01) A
"Default" with respect to Subordinated Debt Securities of any series is defined
in the Subordinated Indenture as (a) an Event of Default with respect to such
series; (b) failure to pay the principal of, or premium, if any, on any
Subordinated Security of such series at its Maturity; (c) failure to pay
interest upon any Subordinated Security of such series when due and payable and
the continuance of such Default for a period of 30 days; (d) failure to perform
any other covenant or agreement of Fleet in the Subordinated Indenture with
respect to Subordinated Debt Securities of such series and continuance of such
Default for 60 days after written notice of such failure, requiring Fleet to
remedy the same; and (e) any other Default provided with respect to Subordinated
Debt Securities of such series. (Section 7.07) If an Event of Default with
respect to any series of Subordinated Debt Securities for which there are
Subordinated Debt Securities outstanding under the Subordinated Indenture occurs
and is continuing, either the Subordinated Trustee or the Holders of not less
than 25% in aggregate principal amount of the Subordinated Debt Securities of
such series may declare the principal amount (or if such Subordinated Debt
Securities are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all Subordinated Debt
Securities of that series to be immediately due and payable. The Holders of a
majority in aggregate principal amount of the Subordinated Debt Securities of
any series
17
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outstanding under the Subordinated Indenture may waive, on behalf of all Holders
of such series, an Event of Default resulting in acceleration of such
Subordinated Debt Securities, but only if all Defaults have been remedied and
all payments due (other than those due as a result of acceleration) have been
made. (Section 7.02) If a Default occurs and is continuing, the Subordinated
Trustee may in its discretion, and at the written request of Holders of not less
than a majority in aggregate principal amount of the Subordinated Debt
Securities of any series outstanding under the Subordinated Indenture and upon
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request and subject to certain other conditions set
forth in the Subordinated Indenture shall, proceed to protect the rights of the
Holders of all the Subordinated Debt Securities of such series. (Section 7.03)
Prior to acceleration of maturity of the Subordinated Debt Securities of any
series outstanding under the Subordinated Indenture, the Holders of a majority
in aggregate principal amount of such Subordinated Debt Securities may waive any
past Default under the Subordinated Indenture except a Default in the payment of
principal of, premium, if any, or interest on the Subordinated Debt Securities
of such series or in respect of a covenant which cannot be modified or amended
without the consent of the Holder of each Outstanding Security of such series
affected. (Section 7.13)
The Subordinated Indenture provides that in the event of a Default specified
in clauses (b) or (c) of the immediately preceding paragraph in payment of
principal of, premium, if any, or interest on any Subordinated Debt Security of
any series, Fleet will, upon demand of the Subordinated Trustee, pay to it, for
the benefit of the holder of any such Subordinated Debt Security, the whole
amount then due and payable on such Subordinated Debt Security for principal,
premium, if any, and interest. The Subordinated Indenture further provides that
if Fleet fails to pay such amount forthwith upon such demand, the Subordinated
Trustee may, among other things, institute a judicial proceeding for the
collection thereof. (Section 7.03)
The Subordinated Indenture also provides that notwithstanding any other
provision of the Subordinated Indenture, the holder of any Subordinated Debt
Security of any series shall have the right to institute suit for the
enforcement of any payment of principal of, premium, if any, and interest on
such Subordinated Debt Security on the respective Stated Maturities (as defined
in the Subordinated Indenture) expressed in such Subordinated Debt Security and
that such right shall not be impaired without the consent of such holder.
(Section 7.08)
Fleet is required to furnish to the Subordinated Trustee annually a
statement as to performance by Fleet of certain of its obligations under the
Subordinated Indenture and as to any Default in such performance. (Section 5.10)
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DESCRIPTION OF WARRANTS
Fleet may issue Warrants for the purchase of Debt Securities. Warrants may
be issued independently or together with Debt Securities offered by any
Prospectus Supplement and may be attached to or separate from any such
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between Fleet and a bank or
trust company, as warrant agent (the "Warrant Agent"). The Warrant Agent will
act solely as an agent of the Company in connection with the Warrants and will
not assume any obligation or relationship of agency or trust for or with any
holders or beneficial owners of Warrants. The following summary of certain
provisions of the Warrants does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the provisions of the Warrant
Agreement that will be filed with the Commission in connection with the offering
of such Warrants.
The Prospectus Supplement relating to a particular issue of Warrants will
describe the terms of such Warrants, including the following: (a) the title of
such Warrants; (b) the offering price for such Warrants, if any; (c) the
aggregate number of such Warrants; (d) the designation and terms of the Debt
Securities purchasable upon exercise of such Warrants; (e) if applicable, the
designation and terms of the Debt Securities with which such Warrants are issued
and the number of such Warrants issued with each such Debt Security; (f) if
applicable, the date from and after which such Warrants and any Debt Securities
issued therewith will be separately transferable; (g) the principal amount of
Debt Securities purchasable upon exercise of a Warrant and the price at which
such principal amount of Debt Securities may be purchased upon exercise (which
price may be payable in cash, securities, or other property); (h) the date on
which the right to exercise such Warrants shall commence and the date on which
such right shall expire; (i) if applicable, the minimum or maximum amount of
such Warrants that may be exercised at any one time; (j) whether the Warrants
represented by the Warrant certificates or Debt Securities that may be issued
upon exercise of the Warrants will be issued in registered or bearer form; (k)
information with respect to book-entry procedures, if any; (l) the currency or
currency units in which the offering price, if any, and the exercise price are
payable; (m) if applicable, a discussion of material United States Federal
income tax considerations; (n) the antidilution provisions of such Warrants, if
any; (o) the redemption or call provisions, if any, applicable to such Warrants;
and (p) any additional terms of the Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Warrants.
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PLAN OF DISTRIBUTION
Fleet may sell Securities to or through underwriters, and also may sell
Securities through agents (which are registered broker-dealers or banks) which
may be affiliates.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities. Certain
restrictions relating to the distribution of Securities in connection with an
International Offering will be set forth in the applicable Prospectus
Supplement.
In connection with the sale of Securities, underwriters or agents acting on
Fleet's behalf may receive compensation from Fleet or from purchasers of
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be underwriters
under the Act and any discounts or commissions received by them and any profits
on the resale of Securities by them may be deemed to be underwriting discounts
and commissions under the Act. Any such underwriter will be identified and any
such compensation will be described in the applicable Prospectus Supplement.
Under agreements which may be entered into by Fleet, underwriters, dealers
and agents who participate in the distribution of Securities may be entitled to
indemnification by Fleet against certain liabilities, including liabilities
under the Act, and to certain rights of contribution from Fleet.
If so indicated in the applicable Prospectus Supplement, Fleet will
authorize underwriters or other persons acting as Fleet's agents to solicit
offers by certain institutions to purchase Debt Securities or Warrants from
Fleet pursuant to delayed delivery contracts providing for payment and delivery
on a future date or dates stated in the applicable Prospectus Supplement. Each
such contract will be for an amount not less than, and the aggregate amount of
such securities sold pursuant to such contracts shall not be less nor more than,
the respective amounts stated in the applicable Prospectus Supplement.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by Fleet. The obligations of any purchaser under
any such contract will not be subject to any condition except that (1) the
purchase of the Debt Securities or Warrants shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject, and (2) if the Debt Securities or Warrants are also being sold to
underwriters acting as principals for their own account, the underwriters shall
have purchased such Debt Securities or Warrants not sold for delayed delivery.
The underwriters and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
Certain of the underwriters and their associates and affiliates may be
customers of, have borrowing relationships with, engage in other transactions
with, and/or perform services, including investment banking services, for, Fleet
or one or more of its affiliates in the ordinary course of business.
EXPERTS
The consolidated financial statements of Fleet incorporated by reference in
Fleet's Annual Report on Form 10-K for the fiscal year ended December 31, 1996,
incorporated by reference herein (and elsewhere in the Registration Statement)
have been incorporated by reference herein (and elsewhere in the Registration
Statement) in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
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LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for Fleet
by Edwards & Angell, One Hospital Trust Plaza, Providence, Rhode Island 02903.
V. Duncan Johnson, a partner of Edwards & Angell, is a director of Fleet
National Bank, a wholly-owned subsidiary of Fleet, and beneficially owns 4,052
shares of Common Stock.
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No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus
Supplement or the Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by Fleet or any
Underwriter. This Prospectus Supplement and the Prospectus do not constitute an
offer to sell or a solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer in such jurisdiction. Neither the delivery of this Prospectus Supplement
or the Prospectus, nor any sale made hereunder shall, under any circumstances,
create any implication that the information herein is correct as of any time
subsequent to the date hereof or that there has been no change in the affairs of
Fleet since such date.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
PROSPECTUS SUPPLEMENT
Available Information.......................... S-2
Incorporation of Certain Documents by S-2
Reference....................................
Fleet Financial Group, Inc..................... S-4
Recent Transactions............................ S-4
Third Quarter Results.......................... S-6
Consolidated Ratios of Earnings to Fixed S-7
Charges......................................
Use of Proceeds................................ S-7
Selected Consolidated Financial Data........... S-8
Description of Subordinated Debentures......... S-10
Underwriting................................... S-13
Legal Matters.................................. S-14
PROSPECTUS
Available Information.......................... 2
Incorporation of Certain Documents by 2
Reference....................................
Fleet Financial Group, Inc. ................... 3
Consolidated Ratios of Earnings to Fixed 7
Charges......................................
Use of Proceeds................................ 7
Description of Debt Securities................. 8
Senior Debt Securities......................... 12
Subordinated Debt Securities................... 15
Description of Warrants........................ 19
Plan of Distribution........................... 20
Experts........................................ 20
Legal Opinions................................. 21
</TABLE>
[LOGO]
Fleet Financial
Group, Inc.
$500,000,000
6 7/8% Subordinated
Debentures Due 2028
PROSPECTUS SUPPLEMENT
Credit Suisse First Boston
Chase Securities Inc.
Goldman, Sachs & Co.
J.P. Morgan & Co.
Salomon Smith Barney
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