<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-62905
[LOGO]
P R O S P E C T U S S U P P L E M E N T
(TO PROSPECTUS DATED SEPTEMBER 24, 1998)
$500,000,000
FLEET BOSTON CORPORATION
7.375% SUBORDINATED NOTES DUE 2009
---------
The subordinated notes will mature on December 1, 2009. Interest on the
subordinated notes will be payable on June 1 and December 1 of each year,
beginning June 1, 2000. Interest will accrue from December 6, 1999. We cannot
redeem the subordinated notes prior to their maturity. There is no sinking fund.
We do not intend to list the subordinated notes on any securities exchange. The
subordinated notes are unsecured. They will rank junior to our senior
indebtedness and our other financial obligations. Holders of subordinated notes
may not accelerate the maturity of the subordinated notes, except upon our
bankruptcy or insolvency.
--------------
THE SUBORDINATED NOTES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the subordinated notes or determined
if this prospectus supplement or the attached prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
--------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
--------------- ---------------
<S> <C> <C>
Initial Price to Public 99.647% $ 498,235,000
Underwriting Discount 0.650% $ 3,250,000
Proceeds to Us (Before Expenses) 98.997% $ 494,985,000
</TABLE>
Your purchase price will also include any interest that has accrued on the
subordinated notes from December 6, 1999.
--------------
The subordinated notes will be delivered to you in global form through the
book-entry delivery system of The Depository Trust Company on December 6, 1999.
The underwriters listed below will purchase the subordinated notes from us
on a firm commitment basis and offer them to you, subject to certain conditions.
--------------
SALOMON SMITH BARNEY
BANCBOSTON ROBERTSON STEPHENS
DONALDSON, LUFKIN & JENRETTE
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
BLAYLOCK & PARTNERS, L.P.
December 1, 1999
<PAGE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH ANY OTHER INFORMATION. YOU SHOULD NOT RELY
ON ANY OTHER INFORMATION IN MAKING YOUR INVESTMENT DECISION.
WE ARE OFFERING TO SELL THE SUBORDINATED NOTES ONLY IN PLACES WHERE SALES
ARE PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT OR
THE ATTACHED PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THEIR RESPECTIVE
DATES.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Updating Information........................................ S-3
Where You Can Find More Information......................... S-3
Forward-Looking Statements.................................. S-3
Fleet Boston Corporation.................................... S-4
Supplemental Selected Consolidated Financial Data........... S-6
Supplemental Consolidated Ratios of Earnings to Fixed
Charges................................................... S-7
Recent Legislation.......................................... S-8
Future Legislation.......................................... S-8
Certain Terms of the Subordinated Notes..................... S-9
Underwriting................................................ S-12
Experts..................................................... S-14
Legal Opinions.............................................. S-14
PROSPECTUS
Available Information....................................... 3
Incorporation of Certain Documents by Reference............. 3
Fleet Financial Group, Inc. ................................ 4
Consolidated Ratios of Earnings to Fixed Charges............ 7
Use of Proceeds............................................. 7
Description of Debt Securities.............................. 8
Subordinated Debt Securities................................ 15
Plan of Distribution........................................ 19
Experts..................................................... 19
Legal Opinions.............................................. 19
</TABLE>
S-2
<PAGE>
UPDATING INFORMATION
Information contained in this prospectus supplement updates and supersedes
information in the accompanying prospectus.
WHERE YOU CAN FIND MORE INFORMATION
You can find more information about us, including where to find information
incorporated by reference, by accessing that information as provided under
"Available Information" and "Incorporation of Certain Documents by Reference" in
this prospectus supplement and accompanying prospectus. Documents incorporated
by reference are available from us without charge, excluding any exhibits to
those documents, unless the exhibit is specifically incorporated by reference as
an exhibit in this prospectus supplement and accompanying prospectus. You can
obtain documents incorporated by reference in this prospectus by requesting them
in writing or by telephone from us at the following address:
Investor Relations Department
Fleet Boston Corporation
P.O. Box 2016, MA BOS 01-20-02
Boston, Massachusetts 02106-2106
617-434-7858
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus, including
information included or incorporated by reference, contains certain
forward-looking statements with respect to our financial condition, results of
operations, plans, objectives, future performance and business, including,
without limitation:
- statements relating to the cost savings and accretion to reported earnings
estimated to result from our merger with BankBoston Corporation;
- statements relating to revenues of the combined company after our merger
with BankBoston;
- statements relating to the restructuring charges estimated to be incurred
in connection with our merger with BankBoston; and
- statements preceded by, followed by or that include the words "believes,"
"expects," "anticipates," "estimates" or similar expressions.
These forward-looking statements involve risks and uncertainties. Actual
results may differ materially from those contemplated by the forward-looking
statements due to many factors, including:
- general political and economic conditions, either internationally or
nationally or in the states in which we are doing business, may be less
favorable than expected;
- interest rate and currency fluctuations, equity and bond market
fluctuations, the level of customers' bankruptcies, and inflation may be
greater than expected;
- competitive pressures among financial services companies may increase
significantly;
- legislative or regulatory changes may adversely affect our business;
- technological changes, including year 2000 data systems compliance issues,
may be more difficult or expensive than anticipated;
- expected cost savings from our merger with BankBoston may not be fully
realized or realized within the expected time frame;
- revenues following our merger with BankBoston may be lower than expected;
- costs or difficulties related to the integration of our business and that
of BankBoston may be greater than expected; and
- the negative impact of the divestitures to be completed in connection with
our merger with BankBoston may be greater than expected.
S-3
<PAGE>
FLEET BOSTON CORPORATION
GENERAL
We are a diversified financial services company, with consumer and
commercial platforms serving approximately 20 million customers nationally and
internationally. Our lines of business include:
- institutional and investment banking;
- cash management;
- trade services;
- export finance;
- mortgage banking;
- corporate finance;
- asset-based lending;
- commercial lending;
- real estate lending;
- government banking;
- investment management services;
- equipment leasing;
- credit cards;
- discount brokerage services;
- student loan processing; and
- full-service banking in leading Latin American Markets.
On October 1, 1999, we completed the merger of BankBoston Corporation into
us.
- The name of the combined company was changed to "Fleet Boston
Corporation."
- The combined company will be doing business under the name "FleetBoston
Financial."
- The headquarters of the combined company will remain in Boston,
Massachusetts.
- Terrence Murray, our Chairman and Chief Executive Officer, was appointed
the Chairman of the Board of Directors and Chief Executive Officer of the
combined company.
- Charles K. Gifford, Chairman and Chief Executive Officer of BankBoston,
was appointed the President and Chief Operating Officer of the combined
company. Mr. Gifford will succeed to the role of Chief Executive Officer
as of December 31, 2001, or at such earlier time as Mr. Murray may step
down from that role and Mr. Gifford will succeed to the role of Chairman
of the Board of Directors on December 31, 2002, or at such earlier time as
Mr. Murray may step down from that role.
- The board of directors of the combined company consists of 13 directors
from Fleet and 11 directors from BankBoston.
- The merger was accounted for under the "pooling-of-interests" method of
accounting. This means that, for accounting and financial reporting
purposes, we will treat our companies as if they had always been one, and
no goodwill will be created. In addition, the merger will be
S-4
<PAGE>
treated as a "reorganization" under the Internal Revenue Code. This means
that we will not recognize any gain or loss as a result of the merger.
- At the effective time of the merger, each share of common stock of
BankBoston outstanding immediately prior to the effective time of the
merger was converted into 1.1844 shares of our common stock.
In connection with obtaining regulatory approvals for the merger, the
Federal Reserve Board and the United States Department of Justice required to us
to agree to divest approximately $13 billion of deposits and $9 billion of loans
from the combined company, resulting in estimated divested income of
$160 million after tax.
All financial information set forth in this prospectus supplement and
accompanying prospectus has been restated for all periods to give effect to the
merger. Because the divestitures will not be significant to us, the financial
information has not been adjusted to show the effects of the divestitures.
At September 30, 1999, our total assets on a consolidated basis were
$185.3 billion, our consolidated total deposits were $113.2 billion and our
consolidated total stockholders' equity was $15.5 billion. Based on total assets
at September 30, 1999, we were the eighth largest bank holding company in the
United States.
For additional information regarding the merger and certain pro forma
financial information relating to the merger, see our current reports on
Form 8-K filed March 17, 1999, April 2, 1999, May 14, 1999, August 12, 1999,
September 16, 1999, September 30, 1999, October 1, 1999, October 15, 1999 and
November 22, 1999, each of which is incorporated by reference into this
prospectus supplement and accompanying prospectus. See "Where You Can Find More
Information."
Our principal office is located at One Federal Street, Boston, Massachusetts
02110, telephone number (617) 346-4000.
S-5
<PAGE>
SUPPLEMENTAL SELECTED
CONSOLIDATED FINANCIAL DATA
FLEET BOSTON CORPORATION
The following unaudited consolidated summary sets forth supplemental
selected financial data for us and our subsidiaries for the nine months ended
September 30, 1999 and 1998 and for each of the years in the five-year period
ending December 31, 1998. The following summary should be read in conjunction
with the supplemental financial information incorporated herein by reference to
other documents. See "Where You Can Find More Information" in this prospectus
supplement. The summary for the nine months ended September 30, 1999 and 1998 is
based on unaudited financial statements which include all adjustments that, in
the opinion of our management, 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, 1999 are not necessarily indicative of the
results expected for 1999 or any other interim period. All data has been
restated to reflect the BankBoston merger, which was accounted for as a pooling
of interests. Certain amounts in prior periods have been reclassified to conform
to current-year presentation. All per common share amounts and associated ratios
have been adjusted to reflect our two-for-one common stock split during 1998.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------- --------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF OPERATIONS
Interest income (fully taxable
equivalent)...................... $ 9,719 $ 9,217 $ 12,400 $ 11,319 $ 10,977 $ 11,398 $ 9,780
Interest expense................... 4,608 4,437 5,946 5,127 5,119 6,009 4,584
-------- -------- -------- -------- -------- -------- --------
Net interest income (fully taxable
equivalent)...................... 5,111 4,780 6,454 6,192 5,858 5,389 5,196
Provision for credit losses........ 688 590 850 522 444 376 219
-------- -------- -------- -------- -------- -------- --------
Net interest income after provision
for credit losses (fully taxable
equivalent)...................... 4,423 4,190 5,604 5,670 5,414 5,013 4,977
Noninterest income................. 5,001 3,788 5,281 4,206 3,658 3,237 2,683
Noninterest expense................ 6,032 5,159 7,050 6,050 5,831 5,831 5,168
Net income......................... 2,072 1,702 2,324 2,246 1,860(a) 1,351(b) 1,428
PER COMMON SHARE(C):
Basic earnings per share........... $ 2.20 $ 1.81 $ 2.47 $ 2.39 $ 1.88(a) $ 1.25(b) $ 1.54
Diluted earnings per share......... 2.15 1.76 2.41 2.33 1.84(a) 1.19(b) 1.45
Weighted average basic shares
outstanding (in thousands)....... 920,667 915,578 916,123 902,442 932,575 895,370 882,131
Weighted average diluted shares
outstanding (in thousands)....... 944,996 938,242 939,136 924,021 949,824 943,344 935,832
Book value......................... $ 16.01 $ 14.38 $ 14.70 $ 13.23 $ 12.08 $ 11.15 $ 9.85
Cash dividends declared............ .81 .735 1.00 .92 .87 .82 .70
Common dividend payout ratio....... 36.79% 40.43% 40.15% 35.55% 40.71% 50.76% 32.13%
RATIO OF EARNINGS TO FIXED CHARGES:
Excluding interest on deposits..... 2.62x 2.60x 2.62x 3.00x 2.79x 1.91x 2.11x
Including interest on deposits..... 1.72 1.62 1.62 1.72 1.61 1.39 1.52
CONSOLIDATED BALANCE SHEET--
AVERAGE BALANCES:
Total assets....................... $187,128 167,959 $170,228 $151,886 $146,108 $141,543 $135,532
Securities held to maturity........ 1,681 1,891 1,874 2,000 1,852 11,777 12,985
Securities available for sale...... 22,773 19,597 19,853 16,321 17,525 16,244 19,198
Loans and leases, net of unearned
income........................... 116,873 109,905 111,039 102,369 97,598 90,447 80,771
Due from brokers/dealers........... 3,289 3,869 3,765 2,884 2,179 1,926 1,606
Interest-bearing deposit
liabilities...................... 90,976 87,533 88,634 82,437 81,824 74,828 71,049
Short-term borrowings.............. 23,037 21,598 21,669 17,127 15,099 23,919 23,825
Due to brokers/dealers............. 4,080 4,693 4,501 3,463 2,645 2,341 1,821
Long-term debt(d).................. 21,311 10,111 10,962 7,993 8,158 8,741 7,506
Stockholders' equity............... 14,621 13,566 13,674 12,188 12,139 10,885 9,785
</TABLE>
S-6
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------- --------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED RATIOS
Net interest margin (fully taxable
equivalent)...................... 4.27% 4.40% 4.40% 4.68% 4.57% 4.24% 4.26%
Return on average assets........... 1.47 1.35 1.37 1.48 1.27(a) .95(b) 1.05
Return on average common
stockholders' equity............. 19.42 17.45 17.64 19.71 16.31(a) 13.16(b) 15.60
Average stockholders' equity to
average assets................... 7.81 8.08 8.03 8.02 8.31 7.69 7.22
Tier 1 risk-based capital ratio.... 7.14 6.90 7.11 7.55 8.30 7.97 8.52
Total risk-based capital ratio..... 11.28 11.30 11.51 11.31 12.18 11.91 12.82
Period-end reserve for credit
losses to period-end loans and
leases, net of unearned income... 2.10 2.01 2.06 2.01 2.35 2.42 2.75
Net charge-offs to average loans
and leases, net of unearned
income........................... .74 .71 .75 .64 .61 .55 .51
Period-end nonperforming assets to
period-end loans and leases, net
of unearned income and other real
estate owned(e).................. .66 .60 .61 .72 1.16 1.03 1.56
</TABLE>
- ------------------------------
(a) Includes impact of merger-related charges ($180 million pre-tax,
$117 million post-tax) recorded in 1996.
(b) Includes impact of the loss on assets held for sale by accelerated
disposition ($175 million pre-tax, $112 million post-tax) and merger-related
charges ($490 million pre-tax, $317 million post-tax) recorded in 1995.
(c) All per share and average share information has been adjusted to reflect our
two-for-one common stock split during 1998.
(d) Amounts include guaranteed preferred beneficial interest in our junior
subordinated debentures.
(e) Excludes $113 million, $126 million, $46 million, $214 million,
$265 million and $317 million of nonperforming assets reclassified to held
for sale by accelerated disposition at September 30, 1999 and 1998, and
December 31, 1998, 1997, 1996 and 1995, respectively. Including such
amounts, the ratios would have been .75%, .71%, .65%, .92%, 1.43% and 1.37%
at September 30, 1999 and 1998, and December 31, 1998, 1997, 1996 and 1995,
respectively.
SUPPLEMENTAL CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------------------------
1999 1998 1997 1996 1995 1994
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits..................... 2.62x 2.62x 3.00x 2.79x 1.91x 2.11x
Including Interest on Deposits..................... 1.72 1.62 1.72 1.61 1.39 1.52
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
"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.
S-7
<PAGE>
RECENT LEGISLATION
On November 12, 1999, President Clinton signed into law legislation that
allows bank holding companies to engage in a wider range of nonbanking
activities, including greater authority to engage in securities and insurance
activities. Under the Gramm-Leach-Bliley Act (the "Act"), a bank holding company
that elects to become a financial holding company may engage in any activity
that the Federal Reserve Board, in consultation with the Secretary of the
Treasury, determines by regulation or order is (1) financial in nature,
(2) incidental to any such financial activity, or (3) complementary to any such
financial activity and does not pose a substantial risk to the safety or
soundness of depository institutions or the financial system generally. This Act
makes significant changes in U.S. banking law, principally by repealing the
restrictive provisions of the 1933 Glass-Steagall Act. The Act specifies certain
activities that are deemed to be financial in nature, including lending,
exchanging, transferring, investing for others, or safeguarding money or
securities; underwriting and selling insurance; providing financial, investment,
or economic advisory services; underwriting, dealing in or making a market in,
securities; and any activity currently permitted for bank holding companies by
the Federal Reserve Board under section 4(c)(8) of the Bank Holding Company Act.
The Act does not authorize banks or their affiliates to engage in commercial
activities that are not financial in nature. A bank holding company may elect to
be treated as a financial holding company only if all depository institution
subsidiaries of the holding company are well-capitalized, well-managed and have
at least a satisfactory rating under the Community Reinvestment Act.
National banks are also authorized by the Act to engage, through "financial
subsidiaries," in any activity that is permissible for a financial holding
company (as described above) and any activity that the Secretary of the
Treasury, in consultation with the Federal Reserve Board, determines is
financial in nature or incidental to any such financial activity, except
(1) insurance underwriting, (2) real estate development or real estate
investment activities (unless otherwise permitted by law), (3) insurance company
portfolio investments and (4) merchant banking. The authority of a national bank
to invest in a financial subsidiary is subject to a number of conditions,
including, among other things, requirements that the bank must be well-managed
and well-capitalized (after deducting from the bank's capital outstanding
investments in financial subsidiaries). The Act provides that state banks may
invest in financial subsidiaries (assuming they have the requisite investment
authority under applicable state law) subject to the same conditions that apply
to national bank investments in financial subsidiaries.
The Act also contains a number of other provisions that will affect our
operations and the operations of all financial institutions. One of the new
provisions relates to the financial privacy of consumers, authorizing federal
banking regulators to adopt rules that will limit the ability of banks and other
financial entities to disclose non-public information about consumers to
non-affiliated entities. These limitations will likely require more disclosure
to consumers, and in some circumstances will require consent by the consumer
before information is allowed to be provided to a third party.
At this time, we are unable to predict the impact the Act may have upon our
or our subsidiaries' financial condition or results of operations.
FUTURE LEGISLATION
Various legislation is from time to time introduced in the U.S. Congress.
This legislation may change banking statutes and the operating environment of
bank holding companies and their subsidiaries in substantial and unpredictable
ways. We cannot accurately predict whether legislation will ultimately be
enacted, and, if enacted, the ultimate effect that it, or implementing
regulations, would have upon our or our subsidiaries' financial condition or
results of operations.
S-8
<PAGE>
CERTAIN TERMS OF THE SUBORDINATED NOTES
GENERAL
The following description of the particular terms of the 7.375% subordinated
notes due 2009 (the "subordinated notes") supplements the description of the
general terms of the Subordinated Securities set forth under the headings
"Description of Debt Securities" and "Subordinated Debt Securities" in the
attached prospectus beginning on page 15. Capitalized terms used but not defined
in this prospectus supplement have the meanings assigned in the attached
prospectus or the subordinated indenture referred to in the prospectus.
The subordinated notes are a series of Subordinated Securities. They 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 us and Bank One Trust Company, National Association
(successor in interest to The First National Bank of Chicago) and will be
initially limited to $500,000,000 aggregate principal amount. They will mature
on December 1, 2009.
The subordinated notes will bear interest at the annual rate of 7.375%.
Interest on the subordinated notes will accrue from December 6, 1999. We will
pay interest on the subordinated notes in arrears on June 1 and December 1 of
each year, beginning June 1, 2000. Interest will be paid to the persons in whose
names the subordinated notes are registered at the close of business on the
preceding May 15 and November 15.
We will make all principal and interest payments on the subordinated notes
in immediately available funds. All sales of the subordinated notes, including
secondary market sales, will settle in immediately available funds.
We cannot redeem the subordinated notes prior to their maturity. No sinking
fund is provided for the subordinated notes.
The subordinated notes may be issued in denominations of $1,000 and integral
multiples of $1,000. The subordinated notes will be represented by one or more
permanent global subordinated notes registered in the name of The Depository
Trust Company ("DTC") or its nominee, as described below.
Our obligations under the subordinated notes will be subordinated in right
of payment to all of our Senior Indebtedness and Other Financial Obligations, as
described in the attached prospectus under the heading "Subordinated Debt
Securities--Subordination" beginning on page 15. As of September 30, 1999, our
outstanding Senior Indebtedness and Other Financial Obligations totaled
approximately $4.5 billion.
Holders of the subordinated notes may not accelerate the maturity of the
subordinated notes, except in the event of our bankruptcy or reorganization.
Holders may not accelerate the subordinated notes if we fail to pay interest or
fail to perform any other agreement in the subordinated notes or the
subordinated indenture. See "Subordinated Debt Securities--Events of Default,
Default, Waivers" beginning on page 17 in the attached prospectus.
BOOK-ENTRY, DELIVERY AND FORM
The subordinated notes will be issued in the form of fully registered global
securities. Each global security will be deposited with, or on behalf of DTC, as
depositary, or its nominee, and registered in the name of, a nominee of DTC. DTC
currently limits the maximum denomination of any global security to
$400 million. Therefore, for purposes of this prospectus supplement, "global
security" refers to the global securities representing the entire issue of
subordinated notes offered by this prospectus supplement. Except under the
limited circumstances described below, global securities are not exchangeable
for definitive certificated subordinated notes.
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<PAGE>
Only institutions that have accounts with DTC or its nominee
("participants") or persons that may hold interests through participants may own
beneficial interests in a global security. DTC will maintain records reflecting
ownership of beneficial interests by participants in the global securities and
transfers of those interests. Participants will maintain records evidencing
ownership of beneficial interests in the global securities by persons that hold
through those participants and transfers of those interests within those
participants. DTC has no knowledge of the actual beneficial owners of the
subordinated notes. You will not receive written confirmation from DTC of your
purchase of a beneficial interest in a global security, but we do expect that
you will receive written confirmation providing details for the transaction, as
well as periodic statements of your holdings, from the participant through which
you entered into the transaction.
DTC has advised us that upon the issuance of a global security and the
deposit of that global security with DTC, DTC will immediately credit, on its
book-entry registration and transfer system, the respective principal amounts
represented by that global security to the accounts of its participants.
We will make payment of principal of, and interest on, subordinated notes
represented by a global security to DTC or its nominee, as the case may be, as
the registered owner and holder of the global security representing those
subordinated notes. DTC has advised us that upon receipt of any payment of
principal of, or interest on, a global security, DTC will immediately credit
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal amount of that global security,
as shown in the records of DTC. Standing instructions and customary practices
will govern payments by participants to owners of beneficial interests in a
global security held through those participants, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name". Those payments will be the sole responsibility of those
participants, subject to any statutory or regulatory requirements that may be in
effect from time to time.
Neither we, the trustees nor any of our respective agents will be
responsible for any aspect of the records of DTC, any nominee or any participant
relating to, or payments made on account of, beneficial interests in a global
security or for maintaining, supervising or reviewing any of the records of DTC,
any nominee or any participant relating to those beneficial interests.
A global security is exchangeable for definitive subordinated notes
registered in the name of a person other than DTC or its nominee only if:
(a) DTC notifies us that it is unwilling or unable to continue as depositary
for that global security or DTC ceases to be registered under the
Securities Exchange Act of 1934;
(b) we determine in our discretion that the global security will be
exchangeable for definitive subordinated notes in registered form; or
(c) there shall have occurred and be continuing an event of default or an
event which, with notice or the lapse of time or both, would constitute
an event of default under the subordinated notes.
Any global security that is exchangeable as described in the preceding
sentence will be exchangeable in whole for definitive, certificated subordinated
notes in registered form, of like tenor and of an equal aggregate principal
amount as the global security, in minimum denominations of $1,000 and integral
multiples of $1,000. The registrar will register the definitive subordinated
notes in the name or names instructed by DTC. We expect that these instructions
will be based upon directions received by DTC from its participants with respect
to ownership of beneficial interests in the global security.
Except as provided above, as an owner of a beneficial interest in a global
security, you will not be entitled to receive physical delivery of subordinated
notes in definitive form and will not be considered the holder of subordinated
notes for any purpose under the subordinated indenture. No global security
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<PAGE>
will be exchangeable except for another global security of like denomination and
tenor to be registered in the name of DTC or its nominee. Accordingly, you must
rely on the procedures of DTC and the participant through which you own your
interest to exercise any rights of a holder under the global security or the
applicable indenture.
We understand that, under existing industry practices, in the event that we
request any action of holders, or an owner of a beneficial interest in a global
security desires to take any action that a holder is entitled to take under the
subordinated notes or the subordinated indenture, DTC would authorize the
participants holding the relevant beneficial interests to take that action, and
those participants would authorize beneficial owners owning through those
participants to take that action or would otherwise act upon the instructions of
beneficial owners owning through them.
DTC has advised us that DTC is a limited purpose trust company organized
under the laws of the State of New York, 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 under the Securities Exchange Act of
1934. DTC was created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions among its participants
in those securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its participants and by the New York Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc. (the "NASD"). Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC.
DTC has advised us that DTC management is aware that some computer
applications, systems, and the like for processing data ("systems") that are
dependent upon calendar dates, including dates before, on, and after January 1,
2000, may encounter "Year 2000 problems". DTC has informed its participants and
other members of the financial community that it has developed and is
implementing a program so that its systems, as the same relate to the timely
payment of distributions (including principal and income payments) to
securityholders, book-entry deliveries, and settlement of trades within DTC,
continue to function appropriately. This program includes a technical
assessment, a remediation plan and a testing phase, each of which is complete.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware, and
third party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility services providers,
among others. DTC has informed its participants and other members of the
financial community that it has contacted third party vendors from whom DTC
acquires services to: (1) impress upon them the importance of those services
being Year 2000 compliant, and (2) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, DTC is in the process of continually developing and updating such
contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
S-11
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated December 1, 1999, we have agreed to sell to Salomon Smith Barney Inc.,
BancBoston Robertson Stephens Inc. (our wholly-owned subsidiary), Donaldson,
Lufkin & Jenrette Securities Corporation, J.P. Morgan Securities Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Blaylock & Partners, L.P.
(collectively, the "underwriters"), and the underwriters have agreed to
purchase, the respective principal amount of subordinated notes set forth after
their names below at the price to the public less the underwriting discount set
forth on the cover page of this prospectus supplement.
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
- ----------- ----------------
<S> <C>
Salomon Smith Barney Inc.................................... $325,000,000
BancBoston Robertson Stephens Inc........................... $ 40,000,000
Donaldson, Lufkin & Jenrette Securities Corporation......... $ 40,000,000
J.P. Morgan Securities Inc.................................. $ 40,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... $ 40,000,000
Blaylock & Partners, L.P.................................... $ 15,000,000
------------
Total................................................... $500,000,000
============
</TABLE>
The following table shows the underwriting discounts and commissions we will
pay to the underwriters in connection with this offering.
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ----------
<S> <C> <C>
Underwriting Discount................................... 0.650% $3,250,000
</TABLE>
In the Underwriting Agreement, the underwriters have agreed, subject to the
terms and conditions set forth in that agreement, to purchase all the
subordinated notes if any subordinated notes are purchased. We have been advised
by the underwriters that the underwriters propose initially to offer the
subordinated notes to the public at the public offering price set forth on the
cover page of this prospectus supplement and to certain dealers at that price
less a concession not in excess of $4.00 per $1,000 principal amount of the
subordinated notes. The underwriters may allow and the dealers may reallow a
concession not in excess of $2.50 per $1,000 principal amount of the
subordinated notes. After the initial public offering, the public offering price
and these concessions may be changed. The underwriters have agreed to reimburse
expenses and certain related amounts payable by us in connection with the
offering estimated at $1,625 thousand.
The Underwriting Agreement provides that we will jointly and severally
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to any payments the
underwriters may be required to make in respect of those liabilities.
In connection with this offering and in compliance with applicable law, the
underwriters may overallot (i.e., sell more than the principal amount of
subordinated notes shown in the first paragraph above) and may effect
transactions which stabilize, maintain or otherwise affect the market price of
the subordinated notes at levels above those which might otherwise prevail in
the open market. Those transactions may include placing bids for the
subordinated notes or effecting purchases of the subordinated notes for the
purpose of pegging, fixing or maintaining the price of the subordinated notes or
for the purpose of reducing a short position created in connection with the
offering. In addition, if the underwriters purchase subordinated notes in the
open market and the securities purchased can be traced to a particular member of
the selling group, the underwriters may require the selling group member in
question to purchase the subordinated notes in question at the cost price to the
underwriters or may recover from (or decline to pay to) the selling group member
in question the
S-12
<PAGE>
selling concession applicable to the securities in question. The underwriters
are not required to engage in any of these activities and any of these
activities, if commenced, may be discontinued at any time.
The underwriters and their respective associates and affiliates may be
customers of, engage in transactions with, and perform investment banking and
other financial services (including commercial lending) for, us and our
subsidiaries in the ordinary course of business. BancBoston Robertson Stephens
Inc., one of the underwriters, is a wholly-owned subsidiary of ours. When a
member of the National Association of Securities Dealers, Inc. ("NASD") such as
BancBoston Robertson Stephens Inc., participates in the distribution of an
affiliated company's securities, the offering must be conducted in accordance
with applicable provisions of the NASD's Conduct Rule 2720 ("CR 2720"). We are
considered to be an "affiliate" (as such term is defined in CR 2720) of
BancBoston Robertson Stephens Inc. Our offer and sale of the subordinated notes
will comply with the applicable requirements of CR 2720 regarding the
underwriting of securities of affiliates. No NASD member participating in the
offering of the subordinated notes will execute a transaction in the
subordinated notes in a discretionary account without the prior written specific
approval of the member's customer.
This prospectus supplement and the related prospectus may be used by
BancBoston Robertson Stephens Inc. in connection with offers and sales related
to secondary market transactions in the subordinated notes. BancBoston Robertson
Stephens Inc. may act as principal or agent in those transactions. Those sales
will be made at prices related to prevailing market prices at the time of sale
or otherwise.
The subordinated notes are new securities with no established trading market
and there can be no assurance as to the liquidity of any markets that may
develop for the subordinated notes, the ability of the holders of the
subordinated notes to sell their subordinated notes or at what price holders of
the subordinated notes will be able to sell their subordinated notes. Future
trading prices of the subordinated notes will depend on many factors, including,
among other things, prevailing interest rates, our operating results, and the
market for similar securities. We have been advised by Salomon Smith Barney Inc.
that it initially intends to make a market in the subordinated notes, but
Salomon Smith Barney Inc. is not obligated to do so and may discontinue any
market making at any time without notice.
S-13
<PAGE>
EXPERTS
Our supplemental consolidated financial statements incorporated in this
prospectus by reference to our Current Report on Form 8-K filed November 22,
1999 amending our Annual Report on Form 10-K for the year ended December 31,
1998 have been so incorporated by reference in this document in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given upon the
authority of that firm as experts in accounting and auditing.
LEGAL OPINIONS
The validity of the securities offered by this prospectus supplement and the
accompanying prospectus will be passed upon for us by Edwards & Angell, LLP, 101
Federal Street, Boston, Massachusetts 02110-1800. V. Duncan Johnson, a partner
of Edwards & Angell, LLP, is a director of Fleet Bank (RI), National
Association, one of our wholly-owned subsidiaries, and beneficially owns 9,856
shares of our 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
$2,336,868,750 (or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a foreign currency unit). 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
$2,336,868,750 (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, (i) 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") and (ii) one or
more Delaware statutory business trusts may offer and sell preferred securities
("Preferred Securities") guaranteed by Fleet to the extent described in the
Registration Statement of which this Prospectus forms a part (a "Guarantee")
concurrent with the sale by Fleet of junior subordinated debentures, notes or
other evidences of indebtedness (the "Junior Subordinated Debentures") to any of
the trusts, in which event such Junior Subordinated Debentures may later be
distributed for no additional consideration to the holders of the Preferred
Securities of such trust upon a dissolution of such trust and the distribution
of the assets thereof. Any such Preferred Stock, Depositary Shares, Common Stock
or Equity Warrants on the one hand, and the Preferred Securities, Guarantee and
Junior Subordinated Debentures, on the other hand, 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
on the one hand, and the sale of Preferred Securities, on the other hand,
pursuant to each 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 September 24, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MADE HEREBY MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN THE SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN
CONNECTION WITH THE OFFERING.
FOR INVESTORS OUTSIDE THE UNITED STATES: NO ACTION HAS BEEN OR WILL BE TAKEN
IN ANY JURISDICTION BY FLEET OR BY ANY UNDERWRITER THAT WOULD PERMIT A PUBLIC
OFFERING OF THE SECURITIES OR POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN
ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE
UNITED STATES. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS COMES ARE REQUIRED
BY FLEET AND THE UNDERWRITERS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY
RESTRICTIONS AS TO THE OFFERING OF THE SECURITIES AND THE DISTRIBUTION OF THIS
PROSPECTUS.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in or incorporated by reference in this
Prospectus and accompanying Prospectus Supplement may be considered
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected as
a result of certain risks and uncertainties, including but not limited to
changes in political and economic conditions, interest rate fluctuations,
competitive product and pricing pressures within Fleet's market, equity and bond
market fluctuations, personal and corporate customers' bankruptcies, inflation,
acquisitions and integrations of acquired businesses, risks relating to Year
2000 issues (particularly with respect to compliance by third parties on which
Fleet relies), as well as other risks and uncertainties detailed from time to
time in the filings of Fleet with the Securities and Exchange Commission (the
"Commission").
2
<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
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, 1997.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998
and June 30, 1998.
3. Current Reports on Form 8-K dated January 15, 1998, January 15, 1998,
January 26, 1998, February 2, 1998, March 4, 1998, March 6, 1998,
March 30, 1998, April 15, 1998, April 28, 1998, May 5, 1998, May 20,
1998, July 7, 1998 and July 15, 1998.
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) 346-4000.
3
<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, 1998, Fleet was the tenth largest bank
holding company in the United States, with total assets of $100.7 billion, total
deposits of $67.0 billion and stockholders' equity of $8.9 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.
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, 1998, Fleet's banking subsidiaries could have
declared additional dividends of approximately $842.0 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
(a) the default of any other of Fleet's subsidiary banks or (b) any assistance
provided by the FDIC to any
4
<PAGE>
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, 1998, 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 regulatory rating. The minimum leverage ratio for all
other bank holding companies is 4%. The rule indicates that the leverage ratio
should be well above the minimum levels for holding companies
5
<PAGE>
experiencing significant growth. 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, 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, 1998, 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, in 1997, merged 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 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
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<PAGE>
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 1998. 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. In July, 1998, the FDIC
indicated that the BIF had a reserve ratio of 1.38% at the end of 1997 and
projects that the ratio will be above the designated reserve ratio of 1.25% at
the end of 1998. On April 28, 1998, the FDIC voted to retain the existing
assessment rate schedule applicable to members of the SAIF for the second half
of 1998.
Fleet's subsidiary banks do not hold significant amounts of deposits insured
by the SAIF.
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,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits........ 3.27x 3.90x 3.38x 1.79x 2.30x 2.39x
Including Interest on Deposits........ 1.83 1.94 1.79 1.36 1.64 1.58
</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.
7
<PAGE>
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. 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 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
8
<PAGE>
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 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 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.
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
9
<PAGE>
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.
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
10
<PAGE>
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 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
11
<PAGE>
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 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
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<PAGE>
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
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
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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)
"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.
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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 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
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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 June 30, 1998, Fleet had an aggregate of $3,052 million in
Subordinated Debt outstanding, of which $832 million is subordinated to Fleet's
Senior Indebtedness and $2,220 million 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.
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)
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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 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
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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)
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 contained in Fleet's Current
Report on Form 8-K dated May 5, 1998, 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, incorporated
by reference herein (and elsewhere in the Registration Statement) and upon the
authority of said firm as experts in accounting and auditing.
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for Fleet
by Edwards & Angell, LLP, One BankBoston Plaza, Providence, Rhode Island 02903.
V. Duncan Johnson, a partner of Edwards & Angell, LLP, 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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[LOGO]
$500,000,000
FLEET BOSTON CORPORATION
7.375% SUBORDINATED NOTES DUE 2009
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P R O S P E C T U S S U P P L E M E N T
DECEMBER 1, 1999
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SALOMON SMITH BARNEY
BANCBOSTON ROBERTSON STEPHENS
DONALDSON, LUFKIN & JENRETTE
J.P. MORGAN & CO.
MERRILL LYNCH & CO.
BLAYLOCK & PARTNERS, L.P.
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