<PAGE>
Prospectus Supplement to Prospectus Dated October 24, 1997
Filed Pursuant to Rule 424(b)(5)
File No. 333-37231
FLEET FINANCIAL GROUP, INC.
[LOGO]
$250,000,000
6.50% Subordinated Notes Due 2008
Interest on the 6.50% Subordinated Notes Due 2008 (the "Subordinated Notes") of
Fleet Financial Group, Inc. ("Fleet") will be payable on March 15 and September
15 of each year, commencing September 15, 1998. The Subordinated Notes will
mature on March 15, 2008. The Subordinated Notes may not be redeemed prior to
maturity and are not subject to any sinking fund.
The Subordinated Notes are unsecured and subordinated as set forth in the
accompanying Prospectus under "Subordinated Debt Securities--Subordination". As
of December 31, 1997, the principal amount of Senior Indebtedness of Fleet and
Fleet's obligations under Other Financial Obligations (each as defined in the
accompanying Prospectus) aggregated approximately $1.8 billion (holding company
only). Payment of principal of the Subordinated Notes 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 Notes or in the performance of any other covenant of Fleet. See
"Subordinated Debt Securities" in the accompanying Prospectus.
The Subordinated Notes 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 Notes in definitive form
will not be issued. Settlement for the Subordinated Notes will be made in
immediately available funds. The Subordinated Notes will trade in the
Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity for the Subordinated Notes 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
Notes--Same-Day Settlement and Payment".
----------------------------------------------------------------
THE SUBORDINATED NOTES 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>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT FLEET(1)(2)
<S> <C> <C> <C>
Per Subordinated Note 99.70% .65% 99.05%
Total $249,250,000 $1,625,000 $247,625,000
</TABLE>
(1) Plus accrued interest, if any, from March 9, 1998.
(2) Before deduction of expenses payable by Fleet estimated at $175,000.
------------------------------------------------------------------------
The Subordinated Notes are offered by the Underwriters, subject to prior sale,
when, as and if issued by the Company and accepted by the Underwriters and
subject to certain other conditions. The Underwriters reserve the right to
withdraw, cancel or modify such offers and to reject orders in whole or in part.
It is expected that the delivery of the Subordinated Notes will be made in
book-entry form through the facilities of the Depository on or about March 9,
1998.
Chase Securities Inc. Salomon Smith Barney
<PAGE>
The date of this Prospectus Supplement is March 4, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SUBORDINATED NOTES
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS AND SYNDICATE SHORT COVERING
TRANSACTIONS. 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,
December 10, 1997, January 15, 1998, January 15, 1998, January 26,
1998 and February 2, 1998.
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
Notes 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 contained
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<PAGE>
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 December 31, 1997, Fleet was among the twelve
largest bank holding companies in the United States, with total assets of $85.5
billion, total deposits of $63.7 billion and stockholders' equity of $8.0
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
banking subsidiaries, and also provides, through its other 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 made three acquisitions which will expand
its investment advisory, discount brokerage and credit card business lines, as
well as expand the number and geographic diversity of its customer base. As a
result of these acquisitions, Fleet expects to double the number of customers
served to approximately 13 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 $466 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 approximately 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 February 1, 1998, Fleet consummated its acquisition of 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. Approximately 22 million
shares of Fleet common stock were issued in the merger. Quick & Reilly is one of
the largest discount brokerage firms in the United States, with revenues for its
fiscal year ended February 28, 1997 of $507 million. The acquisition was
accounted for as a pooling of interests.
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
S-4
<PAGE>
part of the transaction, the top six members of Quick & Reilly's management have
entered into five-year 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.
ADVANTA CORPORATION
On February 20, 1998, Fleet acquired the consumer credit card operations of
Advanta Corporation ("Advanta"), recording goodwill of approximately $463
million and purchased credit card intangibles of approximately $150 million,
with an aggregate potential $100 million earnout to be paid over five years. The
transaction was accounted for under the purchase method of accounting. Advanta's
credit card operations, which earned $30 million in the third quarter of 1997,
added 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 consumer credit card operations allows 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.
S-5
<PAGE>
1997 ANNUAL AND FOURTH QUARTER RESULTS
Fleet reported net income of $1.303 billion for 1997, an increase of $164
million compared to 1996 net income of $1.139 billion. Diluted earnings per
share increased 19% to $4.74 from $3.98 in 1996. Return on assets and return on
equity for the year were 1.59% and 19.53%, respectively, compared to 1.37% and
17.43% in 1996. In the fourth quarter of 1997. Fleet's net income was $335
million, or $1.23 per diluted share, compared to $302 million, or $1.05 per
share in 1996, representing an 11% increase in net income and a 17% increase in
earnings per diluted share. Return on assets and return on equity for the
quarter were 1.62% and 19.23%, respectively, compared with 1.40% and 17.67% for
the fourth quarter of 1996.
Net interest income on a fully taxable equivalent basis totaled $3.7 billion
for 1997, an increase of $228 million from 1996. Net interest margin improved 40
basis points to 5.21% in 1997, as Fleet's balance sheet restructuring program
lowered funding costs and enhanced the mix of earnings assets. Net interest
income for the fourth quarter of 1997 totaled $923 million compared to $910
million in the fourth quarter of 1996, reflecting the continued positive impact
of the actions noted above. Fourth quarter net interest margin was 5.19%, up 19
basis points from last year's 5.00%
The provision for credit losses was $322 million in 1997, an increase of
$109 million from 1996. Net charge-offs in 1997 were virtually flat at $376
million, increasing only $6 million. The provision for credit losses was $90
million in the fourth quarter of 1997 and net charge-offs of $90 million were
down $34 million from the fourth quarter of 1996. The improvement in net
charge-offs in the fourth quarter of 1997 was primarily due to continued
improvement in Fleet's commercial loan portfolio. Nonperforming assets were
reduced by over $300 million (42%) during the year to $416 million. Continuing
this trend in the fourth quarter, nonperforming assets were reduced by $63
million from September 30, 1997. The reserve for loan losses of $1.4 billion
remained unchanged from September 30, 1997, maintaining Fleet's loss coverages
of 2.3% of total loans and 365% of nonperforming loans.
Noninterest income was $2.2 billion for 1997, compared to $2.0 billion in
1996. Service charges, fees and commissions increased 18% due to increases in
cash management and electronic banking volume. Investment services revenue also
increased 12%, as Fleet benefited from strong financial markets in 1997, as well
as increasing levels of assets under management. Additionally, corporate finance
fees, a line of business started in the latter part of 1996, grew from $13
million in 1996 to $47 million in 1997. Mortgage banking revenues decreased 12%
in 1997 primarily due to the second quarter sale of Option One, one of Fleet's
mortgage banking subsidiaries. Noninterest income was $517 million for the
fourth quarter of 1997. This represents an increase in noninterest income from
continuing businesses of $17 million after excluding the impact of divested
businesses over the fourth quarter of 1996. Growth was experienced in nearly all
core noninterest revenue categories including services charges, fees and
commissions, investment services revenue and corporate finance fees.
Noninterest expense totaled $3.4 billion in 1997, compared to $3.3 billion
during 1996. Noninterest expense totaled $796 million in the fourth quarter of
1997. Noninterest expense from continuing businesses declined by $36 million
from $832 million in the fourth quarter of 1996 after excluding $25 million for
noninterest expense from divested businesses. Cost reductions included savings
from the successful completion of the integration of the Shawmut and NatWest
acquisitions. Aggregate cost savings from these two acquisitions totaled $750
million. This total exceeded the original cost savings projections by $150
million, or 25%.
Total assets at December 31, 1997, were $85.5 billion. Stockholders' equity
amounted to $8.0 billion at December 31, 1997, an increase of approximately $600
million from December 31, 1996.
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,
---------------------------------------------------
1997 1996 1995 1994 1993
----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges:
Excluding Interest on
Deposits.................. x 4.53 3.62x 1.78x 2.33x 2.36x
Including Interest on
Deposits.................. 1.96 1.78 1.34 1.62 1.56
</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
THIS SECTION REPLACES THE SECTION ENTITLED "USE OF PROCEEDS" IN THE
ACCOMPANYING PROSPECTUS.
The net proceeds from the sale of the Subordinated Notes are estimated to be
approximately $248 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 each of the years in the five-year
period ending December 31, 1997. 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". Certain
amounts in prior periods have been reclassified to conform to current-year
presentation.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<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).............................. $ 5,888 $ 5,878 $ 6,069 $ 5,260 $ 5,086
Interest expense........................... 2,221 2,439 3,005 2,161 1,917
Net interest income........................ 3,667 3,439 3,064 3,099 3,169
Provision for credit losses................ 322 213 101 65 327
Net interest income after provision for
credit losses............................ 3,345 3,226 2,963 3,034 2,842
Noninterest income......................... 2,247 2,013 1,665 1,468 1,636
Noninterest expense........................ 3,381 3,272 3,550 3,070 3,332
Net income................................. 1,303 1,139 610(a) 849 817(b)
EARNINGS PER COMMON SHARE:
Basic...................................... $ 4.89 $ 4.06 $ 1.71(a) $ 3.37 $ 3.30(b)
Diluted.................................... 4.74 3.98 1.58(a) 3.10 3.04(b)
Weighted average basic shares
outstanding.............................. 253,661,066 262,619,983 243,796,880 243,027,593 236,177,416
Weighted average diluted shares
outstanding.............................. 261,782,974 268,149,940 264,300,713 264,148,882 256,571,288
Book value per common share................ $ 28.10 $ 24.66 $ 22.71 $ 20.68 $ 21.76
Cash dividends declared per common share... 1.84 1.74 1.63 1.40 1.025
Common dividend payout ratios.............. 37.6% 42.8% 90.4% 36.8% 24.6%
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits............. 4.53x 3.62x 1.78x 2.33x 2.36x
Including interest on deposits............. 1.96 1.78 1.34 1.62 1.56
RATIO OF EARNINGS TO FIXED CHARGES AND
DIVIDENDS ON PREFERRED STOCK:
Excluding interest on deposits............. 4.02 3.26 1.74 2.27 2.27
Including interest on deposits............. 1.92 1.74 1.33 1.61 1.54
CONSOLIDATED BALANCE SHEET--
AVERAGE BALANCES:
Total assets............................... $ 82,070 $ 83,124 $ 82,727 $ 79,561 $ 75,286
Securities held to maturity(c)............. 1,167 1,045 7,736 8,787 7,735
Securities available for sale(c)........... 7,507 10,287 12,779 16,923 14,140
Loans and leases, net of unearned income... 58,920 56,074 51,043 44,102 43,283
Interest-bearing deposits.................. 47,514 47,334 43,120 40,113 39,766
Short-term borrowings...................... 4,682 5,844 14,046 15,355 12,807
Long-term debt/subordinated notes
and debentures........................... 4,608 5,486 6,581 5,383 5,039
Stockholders' equity....................... 7,178 7,021 6,545 5,782 5,311
CONSOLIDATED RATIOS:
Net interest margin (fully taxable
equivalent).............................. 5.21% 4.81% 4.12% 4.30% 4.63%
Return on average assets................... 1.59 1.37 .74(a) 1.07 1.09(b)
Return on average common stockholders'
equity................................... 19.53 17.43(d) 9.32(a)(d) 15.66(d) 17.11(b)
Average stockholders' equity to average
assets................................... 8.75 8.45 7.91 7.27 7.05
Tier 1 risk-based capital ratio............ 7.30 7.67 7.61 9.14 10.44
Total risk-based capital ratio............. 10.89 11.36 11.29 12.92 14.89
Period-end reserve for credit losses to
period-end loans and leases, net of
unearned income.......................... 2.34% 2.53% 2.56% 3.25% 3.82%
Net charge-offs to average loans and
leases, net of unearned income........... .65 .66 .59 .54 1.35
Period-end nonperforming assets to
period-end loans and leases, net of
unearned income, and other real estate
owned.................................... .68 1.23(e) .97(e) 1.65 2.35
</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 $3.78, respectively.
(b) Includes impact of cumulative effect of change in accounting method of $53
million in 1993.
(c) 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 19.66%, 17.42%, 9.25% and 15.35%,
respectively, for years ended December 31, 1997, 1996, 1995 and 1994.
(e) Excludes $214 million, $265 million and $317 million of nonperforming assets
reclassified to held for sale or accelerated disposition at December 31,
1997, December 31, 1996 and December 31, 1995, respectively. Including such
amounts, the ratios would have been 1.03%, 1.68% and 1.58% at December 31,
1997, December 31, 1996 and December 31, 1995, respectively.
S-9
<PAGE>
DESCRIPTION OF SUBORDINATED NOTES
THE FOLLOWING DESCRIPTION OF THE SUBORDINATED NOTES OFFERED HEREBY (REFERRED
TO HEREIN AS THE "SUBORDINATED NOTES" 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 Notes 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 Notes will be limited to $250 million aggregate
principal amount and will mature on March 15, 2008. Interest on the Subordinated
Notes will be payable at the rate per annum shown on the cover page of this
Prospectus Supplement from March 9, 1998, or from the most recent Interest
Payment Date to which interest has been paid or provided for, semi-annually on
March 15 and September 15 of each year, beginning on September 15, 1998 to the
persons in whose names the Subordinated Notes are registered at the close of
business on March 1 and September 1 of each year next preceding such Interest
Payment Date. The Subordinated Notes may not be redeemed prior to maturity.
BOOK-ENTRY, DELIVERY AND FORM
The Subordinated Notes 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 Notes 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 Notes 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
interests in such Global Security). The laws of some states may require that
certain persons take physical
S-10
<PAGE>
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 Notes 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 Notes represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of the
Subordinated Notes 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 the 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 Notes 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 Notes
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 Notes
being offered hereby is exchangeable for Subordinated Notes 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 Notes 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 Notes. The Global Security
exchangeable pursuant to the preceding sentence shall be exchangeable for
Subordinated Notes 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
Note or Subordinated Notes 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 Notes 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 Notes 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 notes and notes of corporate issuers is
generally settled in clearinghouse or next day funds. In contrast, the
Subordinated Notes will trade in the Depository's Same-Day Funds Settlement
System until maturity, and secondary market trading activity in the Subordinated
Notes will therefore be required by the Depository to settle in immediately
available funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in the
Subordinated Notes.
S-12
<PAGE>
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated March 4, 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 Notes:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
- ------------------------------------------------------------------------------ --------------
<S> <C>
Chase Securities Inc.......................................................... $ 125,000,000
Salomon Brothers Inc.......................................................... 125,000,000
--------------
Total..................................................................... $ 250,000,000
--------------
--------------
</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 Notes, 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.
The Underwriters have agreed to reimburse Fleet for certain expenses incurred in
connection with the offering of the Subordinated Notes.
Fleet has been advised by the Underwriters that the Underwriters propose to
offer the Subordinated Notes 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 .40% of the principal amount per
Subordinated Note and the Underwriters and such dealers may allow a discount of
.25% of such principal amount per Subordinated Note 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 Notes 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 Notes. 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 Notes.
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 general financing and banking and
investment banking services, for, Fleet and its subsidiaries in the ordinary
course of business.
In connection with the offering of the Subordinated Notes, Chase Securities
Inc., on behalf of the Underwriters, may engage in overallotment, stabilizing
transactions and syndicate covering transactions in accordance with Regulation M
under the Exchange Act. Overallotment involves sales in excess of the offering
size, which creates a short position for the Underwriters. Stabilizing
transactions involve bids to purchase the Subordinated Notes in the open market
for the purpose of pegging, fixing or maintaining the price of the Subordinated
Notes. Syndicate covering transactions involve purchases of the Subordinated
Notes in the open market after the distribution has been completed in order to
cover short positions. Such stabilizing transactions and syndicate covering
transactions may cause the price of the Subordinated Notes to be higher than it
would otherwise be in the absence of such transactions. Such activities, if
commenced, may be discontinued at any time.
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 Notes 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>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by Fleet or any Underwriter. This Prospectus Supplement
and the accompanying 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
accompanying Prospectus, nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that the information herein or therein
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.
- --------------------------------------
Table of Contents
<TABLE>
<S> <C>
Prospectus Supplement
Available Information S-2
Incorporation of Certain S-2
Documents by Reference
Fleet Financial Group, Inc. S-4
Recent Transactions S-4
1997 Annual and Fourth Quarter S-6
Results
Consolidated Ratios of Earnings S-7
to Fixed Charges
Use of Proceeds S-7
Selected Consolidated Financial S-8
Data
Description of Subordinated Notes S-10
Underwriting S-13
Legal Matters S-14
Prospectus
Available Information 2
Incorporation of Certain 2
Documents by Reference
Fleet Financial Group, Inc. 3
Consolidated Ratios of Earnings 7
to Fixed 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>
Prospectus Supplement
FLEET FINANCIAL
GROUP, INC.
$250,000,000
6.50% SUBORDINATED NOTES
DUE 2008
[LOGO]
CHASE SECURITIES INC.
SALOMON SMITH BARNEY
Dated March 4, 1998
