<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NO. 333-59997
PROSPECTUS SUPPLEMENT
(To prospectus dated July 30, 1998)
[LOGO]
$2,000,000,000
Merrill Lynch & Co., Inc.
6% Notes due February 17, 2009
---------------
We are offering the notes for sale in the United States, Europe and Asia.
The notes bear interest at the rate of 6% each year. We will pay interest
on the notes semiannually on February 17 and August 17 of each year, beginning
August 17, 1999. We may not redeem the notes before their maturity, unless we
are required to pay additional amounts as described under "Description of
Notes--Redemption for Tax Reasons".
The notes are unsecured and rank equally with all of our other unsecured
senior indebtedness. We will issue the notes only in registered form in
denominations of $1,000.
We have applied to list the notes on the Luxembourg Stock Exchange.
---------------
<TABLE>
<CAPTION>
Per Note Total
-------- -----
<S> <C> <C>
Public Offering Price (1)............................ 99.488% $1,989,760,000
Underwriting Discount................................ .45% $9,000,000
Proceeds, before expenses, to Merrill Lynch & Co.,
Inc. (1)............................................ 99.038% $1,980,760,000
</TABLE>
(1) Plus accrued interest from February 17, 1999, if settlement occurs after
that date
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The notes will be ready for delivery in book-entry form only through The
Depository Trust Company, Cedelbank and Euroclear on or about February 17,
1999.
---------------
Merrill Lynch & Co.
ABN AMRO Chase Securities Inc.
First Chicago Capital Markets, Inc. First Union Capital Markets Corp.
HSBC Markets J.P. Morgan & Co.
NationsBanc Montgomery Securities LLC Paribas
Salomon Smith Barney Tokyo-Mitsubishi International plc
---------------
The date of this prospectus supplement is February 9, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Merrill Lynch & Co., Inc.................................................. S-3
Where You Can Find More Information....................................... S-3
Incorporation of Information We File with the SEC......................... S-3
Capitalization............................................................ S-5
Summary Financial Information............................................. S-6
Management................................................................ S-7
Description of Notes...................................................... S-8
Certain United States Tax Documentation Requirements...................... S-15
United States Taxation of Non-United States Persons....................... S-16
Underwriting.............................................................. S-18
Validity of Notes......................................................... S-19
General Information....................................................... S-20
Prospectus
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Merrill Lynch & Co., Inc.................................................. 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed
Charges
and Preferred Stock Dividends............................................ 4
Description of Debt Securities............................................ 4
Description of Debt Warrants.............................................. 9
Description of Currency Warrants.......................................... 11
Description of Index Warrants............................................. 12
Description of Preferred Stock............................................ 17
Description of Depositary Shares.......................................... 21
Description of Preferred Stock Warrants................................... 25
Description of Common Stock............................................... 27
Description of Common Stock Warrants...................................... 30
Plan of Distribution...................................................... 32
Experts................................................................... 33
</TABLE>
----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus
supplement and the accompanying prospectus is accurate as of the date on the
front cover of this prospectus supplement only. Our business, financial
condition, results of operations and prospects may have changed since that
date.
This prospectus supplement and the accompanying prospectus include
particulars given in compliance with the rules governing the listing of
securities on the Luxembourg Stock Exchange for the purpose of giving
information with regard to ML&Co. We accept full responsibility for the
accuracy of the information contained in this prospectus supplement and the
accompanying prospectus and confirm, having made all reasonable inquiries, that
to the best of our knowledge and belief there are no other facts the omission
of which would make any statement herein or in the prospectus misleading in any
material respect.
References in this prospectus supplement to "ML&Co.", "we", "us" and
"our" are to Merrill Lynch & Co., Inc.
References in this prospectus supplement to "MLPF&S" are to Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
References herein to "U.S.$", "$" and "dollars" are to the currency of
the United States.
S-2
<PAGE>
MERRILL LYNCH & CO., INC.
We were incorporated under the laws of the State of Delaware, U.S.A., in
1973. Our principal executive office is located at World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281, U.S.A.; our telephone
number is (212) 449-1000. Our registered office in the State of Delaware is
c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801, U.S.A. For a more complete description of
our business, you should see the section entitled "Merrill Lynch & Co., Inc."
which may be found on page 3 of the accompanying prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC.
Our SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for more information
on the public reference rooms and their copy charges. You may also inspect our
SEC reports and other information at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC covering
the notes. For further information on ML&Co. and the notes, you should refer
to our registration statement and its exhibits. This prospectus supplement
summarizes material provisions of contracts and other documents that we refer
you to. Because the prospectus supplement may not contain all the information
that you may find important, you should review the full text of these
documents. We have included copies of these documents as exhibits to our
registration statement.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" the information we file
with them, which means:
. incorporated documents are considered part of the prospectus;
. we can disclose important information to you by referring you to
those documents; and
. information that we file with the SEC automatically updates this
prospectus supplement and supersedes previously incorporated
information.
We incorporate by reference the documents listed below which were filed
with the SEC under the Securities Exchange Act of 1934 ("Exchange Act"):
. annual report on Form 10-K for the year ended December 26, 1997
(excluding the financial information which was restated in Exhibit
99(i) to ML&Co.'s current report on Form 8-K dated December 10,
1998);
. quarterly reports on Form 10-Q for the quarters ended March 27,
1998, June 26, 1998 and September 25, 1998; and
. current reports on Form 8-K dated January 20, 1998, January 30,
1998, February 4, 1998, February 12, 1998, February 23, 1998,
March 19, 1998, April 13, 1998, April 29, 1998, May 19, 1998, June
2, 1998, June 3, 1998, June 15, 1998, June 24, 1998, June 26,
1998, July 2, 1998, July 14, 1998, July 15, 1998, July 29, 1998,
September 3, 1998, September 8, 1998, September 29, 1998, October
13, 1998, October 21, 1998, October 28, 1998, November 3, 1998,
November 24, 1998, December 1, 1998, December 10, 1998,
December 28, 1998 and January 19, 1999.
S-3
<PAGE>
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus until this offering is
completed:
. reports filed under Sections 13(a) and (c) of the Exchange Act;
. definitive proxy or information statements filed under Section 14
of the Exchange Act in connection with any subsequent
stockholders' meeting; and
. any reports filed under Section 15(d) of the Exchange Act.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Mr. Lawrence
M. Egan, Jr., Corporate Secretary's Office, Merrill Lynch & Co., Inc., 100
Church Street, New York, New York 10080-6512, Telephone: (212) 602-8435. This
prospectus supplement and the accompanying prospectus, together with the
documents incorporated by reference herein, are also available free of charge
at the office of Bankers Trust Luxembourg S.A., 14 Boulevard F.D. Roosevelt, L-
2450 Luxembourg.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth, in millions of dollars (except the per
share amount), the consolidated capitalization of ML&Co. at September 25, 1998.
<TABLE>
<CAPTION>
September 25,
1998
-------------
<S> <C>
Short-Term Debt:
Notes payable.................................................. $ 92
Drafts payable, bank loans, and other short-term borrowings.... 6,116
Commercial paper............................................... 27,247
Payables under repurchase agreements and securities loaned
transactions.................................................. 100,174
Current portion of long-term debt.............................. 13,590
--------
Total........................................................ 147,219
--------
Long-Term Debt, less current portion:(1)(2)
Long-term debt................................................. 15,633
Medium-term notes.............................................. 26,559
--------
Total........................................................ 42,192
--------
Preferred Securities Issued by Subsidiaries(3)................... 1,777
--------
Stockholders' Equity:
"Preferred Stockholders' Equity"............................... 425
--------
"Common Stockholders' Equity"
Exchangeable Shares issued; 4,831,224.......................... 71
Common stock, par value $1.33 1/3 per share;
1,000,000,000 shares authorized;
472,660,324 shares issued..................................... 630
Paid-in capital................................................ 1,405
Accumulated other comprehensive income (net of tax)............ (59)
Retained earnings.............................................. 10,227
--------
12,274
Less: Treasury stock, at cost: 119,242,755 shares.............. 2,190
Employee stock transactions................................. 714
--------
Total Common Stockholders' Equity.............................. 9,370
--------
Total Stockholders' Equity..................................... 9,795
--------
TOTAL CAPITALIZATION............................................. $200,983
========
</TABLE>
- --------
(1) From September 26, 1998 to February 3, 1999, long-term borrowings, net of
repayments and repurchases, increased by approximately $4,130 million.
(2) Long-term borrowings at September 25, 1998 include $718 million held in
inventory by subsidiaries for purposes of resale. This amount is eliminated
for purposes of the consolidated financial statements.
(3) Subsequent to September 25, 1998, Merrill Lynch Preferred Capital Trust V
(the "Trust") issued $850 million of Trust Originated Preferred
Securities(SM). The Trust holds preferred securities of a partnership which
is also a subsidiary of ML&Co. The assets of the partnership consist
primarily of debt securities of ML&Co. and one of its eligible controlled
affiliates. ML&Co. has guaranteed, on a subordinated basis, certain
payments by the Trust and the partnership.
There has been no material change in the consolidated capitalization of
ML&Co. since September 25, 1998 except as otherwise described in the footnotes
above.
S-5
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following summary of consolidated financial information was derived
from, and is qualified in its entirety by reference to, the financial
statements and other information and data contained in ML&Co.'s annual report
on Form 10-K for the year ended December 26, 1997, quarterly report on Form 10-
Q for the period ended September 25, 1998 and current reports on Form 8-K dated
December 10, 1998 and January 19, 1999. The current report on Form 8-K dated
December 10, 1998 restated certain financial information included in ML&Co.'s
annual report on Form 10-K for the year ended December 26, 1997 with respect to
ML&Co.'s merger with Midland Walwyn Inc. that was accounted for as a pooling-
of-interests. See "Incorporation of Information We File with the SEC". The
condensed consolidated financial statements contained in the quarterly report
and current report on Form 8-K dated January 19, 1999 are unaudited; however,
in the opinion of our management, all adjustments (consisting only of normal
recurring accruals and a provision for costs related to staff reductions)
necessary for a fair statement of the results of operations have been included.
The year-end results include 52 weeks for 1994, 1995, 1996, 1997 and 1998.
We conduct our business in highly volatile markets. Consequently, our
results can be affected by many factors, including general market conditions,
the liquidity of secondary markets, the level and volatility of interest rates
and currency values, the valuation of securities positions, competitive
conditions, and the size, number, and timing of transactions. In periods of
unfavorable market activity, profitability can be adversely affected because
certain expenses remain relatively fixed. As a result, net earnings and
revenues can vary significantly from period to period. Thus, interim results
may not necessarily be representative of the full year results of operations.
<TABLE>
<CAPTION>
Year Ended Last Friday in December 1998(2)
----------------------------------- ------------------
September December
1994(1) 1995(1) 1996(1) 1997(1) 25, 25,
-------- -------- -------- -------- --------- --------
(in millions, except ratios)
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $ 18,573 $ 22,060 $ 25,713 $ 32,499 $ -- $35,853
Net revenues(3)......... $ 9,959 $ 10,615 $ 13,621 $ 16,256 $ -- $17,547
Earnings before income
taxes and cumulative
effect of changes in
accounting
principles(4).......... $ 1,747 $ 1,836 $ 2,628 $ 3,111 $ -- $ 2,105
Cumulative effect of
changes in accounting
principles (net of
applicable income
taxes)................. -- -- -- -- -- $ 5
Net earnings............ $ 1,030 $ 1,126 $ 1,648 $ 1,935 $ -- $ 1,259
Ratio of earnings to
fixed charges(4)....... 1.2 1.2 1.2 1.2 1.1 --
Total assets(5)......... $165,920 $179,452 $217,266 $296,980 $353,391 --
Long-term
borrowings(6).......... $ 14,911 $ 17,389 $ 26,206 $ 43,143 $ 55,064 --
Preferred securities
issued by
subsidiaries(7)........ $ 51 $ 51 $ 327 $ 627 $ 1,777 --
Stockholders'
equity(8).............. $ 5,951 $ 6,288 $ 7,067 $ 8,539 $ 9,780 --
</TABLE>
- --------
(1) Information in the table above has been restated for the Midland Walwyn
Inc. ("Midland Walwyn") merger. On August 26, 1998, ML&Co., through a
Canadian subsidiary, acquired the outstanding shares of Midland Walwyn, a
Canadian broker-dealer, in a transaction accounted for as a pooling-of-
interests. The effect of combining Midland Walwyn into the results of
operations and financial positions was not material.
(2) The balance sheet information provided as of September 25, 1998 is from the
quarterly report on Form 10-Q for the period ended September 25, 1998,
which is unaudited. Balance sheet information as of December 25, 1998 is
not available as of the date of this prospectus supplement. The earnings
information provided for the year ended December 25, 1998 is from the
current report on Form 8-K dated January 19, 1999, which is unaudited.
(3) Net revenues are revenues net of interest expense.
(4) For the purpose of calculating the ratio of earnings to fixed charges,
"earnings" consist of earnings from continuing operations before income
taxes and fixed charges. "Fixed charges" consist of interest costs,
amortization of debt expense, preferred stock dividend requirements of
majority-owned subsidiaries, and that portion of rentals estimated to be
representative of the interest factor. The ratio of earnings to fixed
charges for the year ended December 25, 1998 is not available as of the
date of this prospectus supplement.
(5) In 1994, ML&Co. adopted Financial Accounting Standards Board ("FASB")
Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts,
and FASB Interpretation No. 41, Offsetting of Amounts Related to Certain
Repurchase and Reverse Repurchase Agreements, which increased assets and
liabilities at December 30, 1994 by approximately $8,500 million.
(6) To finance its diverse activities, ML&Co. and certain of its subsidiaries
borrow substantial amounts of short-term funds on a regular basis. Although
the amount of short-term borrowings varies significantly with the level of
general business activity, on September 25, 1998, $806 million of bank
loans and $27,247 million of commercial paper were outstanding. In
addition, certain of ML&Co.'s subsidiaries lend securities and enter into
repurchase agreements to obtain financing. At September 25, 1998, cash
deposits for securities loaned and securities sold under agreements to
repurchase amounted to $11,434 million and $88,740 million, respectively.
For more information with respect to long-term borrowings, see information
included under the caption "Capitalization".
(7) In January and June 1998, Merrill Lynch Preferred Capital Trust III and IV
(the "Trusts") issued $750 million and $400 million of Trust Originated
Preferred Securities(SM), respectively. During the 1998 fourth quarter,
Merrill Lynch Preferred Capital Trust V issued $850 million of Trust
Originated Preferred Securities(SM). The Trusts hold preferred securities of
partnerships which are also subsidiaries of ML&Co. The assets of the
partnerships consist primarily of debt securities of ML&Co. and certain of
its eligible controlled affiliates. ML&Co. has guaranteed, on a
subordinated basis, certain payments by the Trusts and the partnerships.
(8) In April 1998, stockholders approved the proposal to amend ML&Co.'s
Certificate of Incorporation to increase the authorized number of shares of
common stock from 500 million to 1 billion.
S-6
<PAGE>
MANAGEMENT
Directors
The directors of ML&Co. and their principal occupations as of the date
hereof are set forth in the following table.
<TABLE>
<CAPTION>
Name Principal Occupation
---- --------------------
<C> <S>
David H. Komansky........ Chairman of the Board and Chief Executive Officer of
ML&Co.
Herbert M. Allison, Jr... President and Chief Operating Officer of ML&Co.
W.H. Clark............... Corporate Director; former Chairman of the Board and
Chief Executive Officer of Nalco Chemical Company
Jill K. Conway........... Visiting Scholar, Massachusetts Institute of
Technology; former President of Smith College
Stephen L. Hammerman..... Vice Chairman of the Board and General Counsel of
ML&Co.
Earle H. Harbison, Jr.... Chairman of the Board of Harbison Corporation;
former Chairman of the Executive Committee,
President and Chief Operating Officer of Monsanto
Company
George B. Harvey......... Corporate Director; former Chairman of the Board,
President and Chief Executive Officer of Pitney
Bowes Inc.
William R. Hoover........ Chairman of the Executive Committee of, Consultant
to, and former Chairman of the Board, Chief
Executive Officer and President of, Computer
Sciences Corporation
Robert P. Luciano........ Corporate Director; former Chairman of the Board and
Chief Executive Officer of Schering-Plough
Corporation
David K. Newbigging...... Chairman of Friends' Provident Life Office; former
Chairman of the Board of Equitas Holdings Limited;
former Chairman and Senior Managing Director of
Jardine, Matheson & Co., Limited
Aulana L. Peters......... Partner in the law firm of Gibson, Dunn & Crutcher;
former Commissioner of the U.S. Securities and
Exchange Commission
John J. Phelan, Jr....... Senior Advisor, Boston Consulting Group; former
Chairman of the Board and Chief Executive Officer of
the New York Stock Exchange, Inc.
John L. Steffens......... Vice Chairman of the Board and Head of the U.S.
Private Client Group of ML&Co.
William L. Weiss......... Corporate Director; Chairman Emeritus and former
Chairman of the Board and Chief Executive Officer of
Ameritech Corporation
</TABLE>
The business address of the directors of ML&Co. is World Financial
Center, North Tower, 250 Vesey Street, New York, New York 10281.
Officers
In addition to the directors named above, the following persons, all of
whom are full-time employees of ML&Co., hold the offices indicated in the
following table as of the date hereof.
<TABLE>
<CAPTION>
Name Office
---- ------
<S> <C>
Thomas W. Davis......... Executive Vice President
Barry S. Friedberg...... Executive Vice President
Edward L. Goldberg...... Executive Vice President
Jerome P. Kenney........ Executive Vice President
E. Stanley O'Neal....... Executive Vice President and Chief Financial Officer
Thomas H. Patrick....... Executive Vice President
Jeffrey M. Peek......... Executive Vice President
Winthrop H. Smith, Jr... Executive Vice President
Theresa Lang............ Senior Vice President and Treasurer
Michael J. Castellano... Senior Vice President and Controller
Andrea L. Dulberg....... Secretary
</TABLE>
The business address of the officers of ML&Co. is World Financial Center,
North Tower, 250 Vesey Street, New York, New York 10281.
S-7
<PAGE>
DESCRIPTION OF NOTES
General
The following description of the terms of the notes supplements, and to
the extent it is inconsistent replaces, the description of the general terms
and provisions of debt securities set forth in the accompanying prospectus. The
notes are part of the debt securities registered by ML&Co. with the SEC in July
1998 to be issued on terms to be determined at the time of sale. The notes are
to be issued as separate series of senior debt securities under the 1983
Indenture, which is more fully described in the accompanying prospectus.
The 6% notes due February 17, 2009 will mature at par on February 17,
2009. The notes will bear interest at the rate of 6% per annum from February
17, 1999, payable semiannually on February 17 and August 17 of each year,
commencing August 17, 1999, and at maturity, to the persons in whose names the
notes are registered on the preceding February 2 and August 2, respectively.
If any interest payment date or maturity date falls on a day that is not
a Business Day the related payment of principal or interest will be made on the
next succeeding Business Day as if made on the date such payment was due, and
no interest will accrue on the amount so payable for the period from and after
such interest payment date or maturity date, as the case may be. "Business Day"
with respect to any place of payment means each Monday, Tuesday, Wednesday,
Thursday and Friday which is neither a legal holiday nor a day on which banking
institutions in such place of payment are authorized or obligated by law,
regulation or executive order to close. The amount of interest payable for the
notes for any period will be computed on the basis of a 360-day year of twelve
30-day months.
The notes are not subject to redemption by ML&Co. before maturity unless
certain events occur involving U.S. taxation. See "Description of Notes--
Redemption for Tax Reasons".
The notes will be issued in denominations of $1,000 and integral
multiples thereof.
Any notes issued in definitive form will be issued only in fully
registered form, without coupons, in denominations of $1,000 and in integral
multiples of $1,000, in the amount of each holder's registered holdings. Any
notes so issued will be registered in such names, and in such denominations, as
the Depositary shall request. Such notes may be presented for registration of
transfer or exchange at the office of the Trustee in The City of New York and
principal thereof and interest thereon will be payable at such office of the
Trustee, provided that interest thereon may be paid by check mailed to the
registered holders of the definitive notes. In the event definitive notes are
issued, the holders thereof will be able to receive payments thereon and effect
transfers thereof at the offices of Chase Manhattan Bank Luxembourg S.A. or its
successor as paying agent in Luxembourg with respect to the notes.
ML&Co. has appointed Chase Manhattan Bank Luxembourg S.A. as paying agent
and transfer agent in Luxembourg with respect to the notes in definitive form,
and as long as the notes are listed on the Luxembourg Stock Exchange, ML&Co.
will maintain a paying and transfer agent in Luxembourg and any change in the
Luxembourg paying agent and transfer agent will be published in Luxembourg. See
"Description of Notes--Notices".
Depositary
Upon issuance, all notes of will be represented by one or more fully
registered global notes. Each global note will be deposited with, or on behalf
of, The Depository Trust Company (otherwise known as DTC) or any successor to
it (the "Depositary"), as Depositary, and registered in the name of Cede & Co.
(DTC's partnership nominee). Unless and until it is exchanged in whole or in
part for notes in definitive form, no global note may be transferred except as
a whole by the Depositary to a nominee of such Depositary or by a
S-8
<PAGE>
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor. Investors may elect to hold
interests in the global notes through either the Depositary (in the United
States) or Cedelbank ("Cedelbank"), and Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System ("Euroclear"), if
they are participants in such systems, or indirectly through organizations
which are participants in such systems. Cedelbank and Euroclear will hold
interests on behalf of their participants through customers' securities
accounts in Cedelbank's and Euroclear's names on the books of their respective
depositaries, which in turn will hold such interests in customers' securities
accounts in the depositaries' names on the books of the Depositary. Citibank,
N.A. will act as depositary for Cedelbank and The Chase Manhattan Bank, not in
its capacity as Trustee under the 1983 Indenture, will act as depositary for
Euroclear (in such capacities, the "U.S. Depositaries").
So long as the Depositary, or its nominee, is a registered owner of a
global note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the notes represented by such global
note for all purposes under the 1983 Indenture. Except as provided below, the
beneficial owners of the notes represented by a global note will not be
entitled to have the notes represented by such global note registered in their
names, will not receive or be entitled to receive physical delivery of the
notes in definitive form and will not be considered the owners or holders
thereof under the 1983 Indenture, including for purposes of receiving any
reports delivered by ML&Co. or the Trustee pursuant to the 1983 Indenture.
Accordingly, each person owning a beneficial interest in a global note must
rely on the procedures of the Depositary and, if such person is not a
participant of the Depositary, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the 1983 Indenture. ML&Co. understands that under existing industry practices,
in the event that ML&Co. requests any action of holders or that an owner of a
beneficial interest which a holder is entitled to give or take under the 1983
Indenture, the Depositary would authorize the participants holding the relevant
beneficial interests to give or take such action, and such participants would
authorize beneficial owners owning through such participants to give or take
such action or would otherwise act upon the instructions of beneficial owners.
Conveyance of notices and other communications by the Depositary to
participants, by participants to indirect participants and by participants and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
If (x) the Depositary is at any time unwilling or unable to continue as
Depositary and a successor depositary is not appointed by ML&Co. within 60
days, (y) ML&Co. executes and delivers to the Trustee a company order to the
effect that the global notes shall be exchangeable for certificated notes or
(z) an Event of Default has occurred and is continuing with respect to the
notes, the global notes will be exchangeable for notes in definitive form of
like tenor and of an equal aggregate principal amount, in denominations of
$1,000 and integral multiples of $1,000. Such definitive notes shall be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions may be based upon directions received by
the Depositary from participants with respect to ownership of beneficial
interests in such global notes.
The following is based on information furnished by DTC:
DTC will act as securities depositary for the notes. The notes will be
issued as fully registered notes registered in the name of Cede & Co. (DTC's
partnership nominee). One or more fully registered global notes will be issued
for the aggregate principal amount of the notes and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry
S-9
<PAGE>
changes in participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct participants of DTC include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its direct
participants and by the NYSE, the American Stock Exchange, Inc., and the NASD.
Access to DTC's system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a direct participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
Purchases of notes under DTC's system must be made by or through direct
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each beneficial owner is in turn to be recorded on the
records of direct and indirect participants. Beneficial owners will not receive
written confirmation from DTC of their purchase, but beneficial owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the direct or indirect
participants through which such beneficial owner entered into the transaction.
Transfers of ownership interests in the notes are to be accomplished by entries
made on the books of participants acting on behalf of beneficial owners.
Beneficial owners will not receive certificates representing their ownership
interests in notes, except as provided above.
To facilitate subsequent transfers, all notes deposited with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. The deposit of
notes with DTC and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the actual beneficial
owners of the notes; DTC's records reflect only the identity of the direct
participants to whose accounts such notes are credited, which may or may not be
the beneficial owners. The participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the
notes. Under its usual procedures, DTC mails an Omnibus Proxy to ML&Co. as soon
as possible after the applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those direct participants to whose
accounts the notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Principal, additional amounts, if any, and/or interest payments on the
notes will be made in immediately available funds to DTC. DTC's practice is to
credit direct participants' accounts on the applicable payment date in
accordance with their respective holdings shown on the Depositary's records
unless DTC has reason to believe that it will not receive payment on such date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such participant and not of DTC, the Trustee or
ML&Co., subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, additional amounts, if any, and/or
interest to DTC is the responsibility of ML&Co. or the Trustee, disbursement of
such payments to direct participants shall be the responsibility of DTC, and
disbursement of such payments to the beneficial owners shall be the
responsibility of direct and indirect participants.
DTC has advised us that management of DTC 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 direct and indirect
participants and other members of the financial community (the "Industry") that
it has developed and is implementing a program so that its Systems, as the same
relate to the timely payment of distributions
S-10
<PAGE>
(including principal and interest payments) to securityholders, book-entry
deliveries, and settlement of trades within DTC ("Depositary Services"),
continue to function appropriately. This program includes a technical
assessment and a remediation plan, each of which is complete. Additionally,
DTC's plan includes a testing phase, which is expected to be completed within
appropriate time frames.
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 DTC's direct and indirect participants, 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 service providers, among others. DTC has informed the
Industry that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to: (i) impress upon them the
importance of such services being Year 2000 compliant; and (ii) 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 developing
such contingency plans as it deems appropriate.
According to DTC, the information in the preceding two paragraphs with
respect to DTC has been provided to the Industry for informational purposes
only and is not intended to serve as a representation, warranty, or contract
modification of any kind.
DTC may discontinue providing its services as securities depositary with
respect to the notes at any time by giving reasonable notice to ML&Co. or the
Trustee. Under such circumstances, in the event that a successor securities
depositary is not obtained, note certificates are required to be printed and
delivered.
ML&Co. may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event,
note certificates will be printed and delivered.
Cedelbank advises that it is incorporated under the laws of Luxembourg as
a professional depositary. Cedelbank holds securities for its participating
organizations ("Cedel Participants") and facilitates the clearance and
settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Cedelbank provides
to Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedelbank interfaces with domestic
markets in several countries. As a professional depositary, Cedelbank is
subject to regulation by the Luxembourg Monetary Institute. Cedel Participants
are recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the underwriters. Indirect
access to Cedelbank is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Cedel Participant either directly or indirectly.
Distributions with respect to the notes held beneficially through
Cedelbank will be credited to cash accounts of Cedel Participants in accordance
with its rules and procedures, to the extent received by the U.S. Depositary
for Cedelbank.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in
several countries. Euroclear is operated by the Brussels, Belgium office of
Morgan Guaranty Trust Company of New York (the "Euroclear Operator"), under
contract with Euroclear Clearance Systems S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear
S-11
<PAGE>
Operator, not the Cooperative. The Cooperative establishes policy for Euroclear
on behalf of Euroclear Participants. Euroclear Participants include banks
(including central banks), securities brokers and dealers and other
professional financial intermediaries and may include the underwriters.
Indirect access to Euroclear is also available to other firms that clear
through or maintain a custodial relationship with a Euroclear Participant,
either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of the Euroclear System, and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within Euroclear,
withdrawals of securities and cash from Euroclear, and receipts of payments
with respect to securities in Euroclear. All securities in Euroclear are held
on a fungible basis without attribution of specific certificates to specific
securities clearance accounts. The Euroclear Operator acts under the Terms and
Conditions only on behalf of Euroclear Participants, and has no record of or
relationship with persons holding through Euroclear Participants.
Distributions with respect to notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary
for Euroclear.
Global Clearance and Settlement Procedures
Initial settlement for the notes will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way in accordance with the Depositary's rules and will be settled in
immediately available funds using the Depositary's Same-Day Funds Settlement
System. Secondary market trading between Cedel Participants and/or Euroclear
Participants will occur in the ordinary way in accordance with the applicable
rules and operating procedures of Cedelbank and Euroclear and will be settled
using the procedures applicable to conventional eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depositary on the one hand, and directly or indirectly through
Cedel or Euroclear Participants, on the other, will be effected in the
Depositary in accordance with the Depositary's rules on behalf of the relevant
European international clearing system by its U.S. Depositary; however, such
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
U.S. Depositary to take action to effect final settlement on its behalf by
delivering or receiving notes in the Depositary, and making or receiving
payment in accordance with normal procedures for same-day funds settlement
applicable to the Depositary. Cedel Participants and Euroclear Participants may
not deliver instructions directly to the Depositary.
Because of time-zone differences, credits of notes received in Cedelbank
or Euroclear as a result of a transaction with a DTC participant will be made
during subsequent securities settlement processing and will be credited the
business day following the Depositary settlement date. Such credits or any
transactions in such notes settled during such processing will be reported to
the relevant Euroclear or Cedel Participants on such business day. Cash
received in Cedelbank or Euroclear as a result of sales of notes by or through
a Cedel Participant or a Euroclear Participant to a DTC participant will be
received with value on the Depositary settlement date but will be available in
the relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in the Depositary.
S-12
<PAGE>
Although the Depositary, Cedelbank and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of notes among
participants of the Depositary, Cedelbank and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such
procedures may be discontinued at any time.
Notices
Notices to holders of the notes will be sent by mail to the registered
holders and will be published, whether the notes are in global or definitive
form, and so long as the notes are listed on the Luxembourg Stock Exchange, in
a daily newspaper of general circulation in Luxembourg. It is expected that
publication will be made in Luxembourg in the "Luxemburger Wort." Any such
notice shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication. So long as
the notes are listed on the Luxembourg Stock Exchange, any change in the
Luxembourg paying agent and transfer agent will be published in Luxembourg in
the manner set forth above.
Further Issues
We may from time to time, without notice to or the consent of the
registered holders of the notes, create and issue further notes ranking "pari
passu" with the notes in all respects (or in all respects except for the payment
of interest accruing prior to the issue date of the notes or except for the
first payment of interest following the issue date of the notes) and so that
such further notes may be consolidated and form a single series with the notes
and have the same terms as to status, redemption or otherwise as the notes.
Payment of Additional Amounts
We will, subject to the exceptions and limitations set forth below, pay
as additional interest on the notes, such additional amounts as are necessary
in order that the net payment by ML&Co. or a paying agent of the principal of
and interest on the notes to a holder who is a non-United States person (as
defined below), after deduction for any present or future tax, assessment or
other governmental charge of the United States or a political subdivision or
taxing authority thereof or therein, imposed by withholding with respect to the
payment, will not be less than the amount provided in the notes to be then due
and payable; "provided, however," that the foregoing obligation to pay
additional amounts shall "not" apply:
(1) to any tax, assessment or other governmental charge that is imposed
or withheld solely by reason of the holder, or a fiduciary, settlor,
beneficiary, member or shareholder of the holder if the holder is an
estate, trust, partnership or corporation, or a person holding a power over
an estate or trust administered by a fiduciary holder, being considered as:
(a) being or having been present or engaged in a trade or business in
the United States or having had a permanent establishment in the United
States;
(b) having a current or former relationship with the United States,
including a relationship as a citizen or resident thereof;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled foreign
corporation with respect to the United States or a corporation that has
accumulated earnings to avoid United States federal income tax;
(d) being or having been a "10-percent shareholder" of ML&Co. as
defined in section 871 (h) (3) of the United States Internal Revenue
Code or any successor provision; or
(e) being a bank receiving payments on an extension of credit made
pursuant to a loan agreement entered into in the ordinary course of its
trade or business;
(2) to any holder that is not the sole beneficial owner of the note, or a
portion thereof, or that is a fiduciary or partnership, but only to the
extent that a beneficiary or settlor with respect to the fiduciary, a
beneficial owner or member of the partnership would not have been entitled
to the payment of an additional amount had the beneficiary, settlor,
beneficial owner or member received directly its beneficial or distributive
share of the payment;
S-13
<PAGE>
(3) to any tax, assessment or other governmental charge that is imposed
or withheld solely by reason of the failure of the holder or any other
person to comply with certification, identification or information
reporting requirements concerning the nationality, residence, identity or
connection with the United States of the holder or beneficial owner of such
note, if compliance is required by statute, by regulation of the United
States Treasury Department or by an applicable income tax treaty to which
the United States is a party as a precondition to exemption from such tax,
assessment or other governmental charge;
(4) to any tax, assessment or other governmental charge that is imposed
otherwise than by withholding by ML&Co. or a paying agent from the payment;
(5) to any tax, assessment or other governmental charge that is imposed
or withheld solely by reason of a change in law, regulation, or
administrative or judicial interpretation that becomes effective more than
15 days after the payment becomes due or is duly provided for, whichever
occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer, wealth or
personal property tax or similar tax, assessment or other governmental
charge;
(7) to any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of principal of or interest
on any note, if such payment can be made without such withholding by any
other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5), (6)
and (7).
The notes are subject in all cases to any tax, fiscal or other law or
regulation or administrative or judicial interpretation applicable thereto.
Except as specifically provided under this heading "Payment of Additional
Amounts" and under the heading "Description of Notes--Redemption for Tax
Reasons", ML&Co. shall not be required to make any payment with respect to any
tax, assessment or other governmental charge imposed by any government or a
political subdivision or taxing authority thereof or therein.
As used under this heading "Payment of Additional Amounts" and under the
headings "Description of Notes--Redemption for Tax Reasons", "Certain United
States Tax Documentation Requirements" and "United States Taxation of Non-
United States Persons" the term "United States" means the United States of
America (including the States and the District of Columbia) and its
territories, its possessions and other areas subject to its jurisdiction,
"United States person" means any individual who is a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States, any state thereof or the District of
Columbia (other than a partnership that is not treated as a United States
person under any applicable Treasury regulations), any estate the income of
which is subject to United States federal income taxation regardless of its
source, or any trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of the
trust. Notwithstanding the preceding sentence, to the extent provided in the
Treasury regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to such date that elect to continue to
be treated as United States persons will also be a United States person. "Non-
United States person" means a person who is not a United States person.
Redemption for Tax Reasons
If, as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States (or any
political subdivision or taxing authority thereof or therein), or any change
in, or amendments to, an official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
is announced or becomes effective on or after the date of this prospectus
supplement, ML&Co. becomes or, based upon a written opinion of independent
counsel selected by ML&Co., will become obligated to pay additional amounts as
described herein under the heading "Description of Notes--Payment of Additional
Amounts" with respect to the notes offered hereby, then ML&Co. may, at its
option redeem, as a whole, but not in part, the notes on not less than 30 nor
more than 60 days' prior notice, at a redemption price equal to 100% of their
principal amount, together with interest accrued but unpaid thereon to the date
fixed for redemption.
S-14
<PAGE>
CERTAIN UNITED STATES TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of a note will generally be subject to the 30% United
States federal withholding tax that generally applies to payments of interest
on a registered form debt obligation issued by a United States person, unless
one of the following steps is taken to obtain an exemption from or reduction of
the tax:
"Exemption for Non-United States persons (IRS Form W-8)." A beneficial
owner of a note that is a non-United States person (other than certain persons
that are related to ML&Co. through stock ownership as described in clauses (x)
(a) and (b) of Paragraph (i) under "United States Taxation of Non-United States
Persons--Income and Withholding Tax") can obtain an exemption from the
withholding tax by providing a properly completed IRS Form W-8 (Certificate of
Foreign Status). Copies of IRS Form W-8 may be obtained from the Luxembourg
listing agent.
"Exemption for Non-United States persons with effectively connected income
(IRS Form 4224)." A beneficial owner of a note that is a non-United States
person, including a non-United States corporation or bank with a United States
branch, that conducts a trade or business in the United States with which
interest income on a note is effectively connected, can obtain an exemption
from the withholding tax by providing a properly completed IRS Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States).
"Exemption or reduced rate for Non-United States persons entitled to the
benefits of a treaty (IRS Form 1001)." A beneficial owner of a note that is a
non-United States person entitled to the benefits of an income tax treaty to
which the United States is a party can obtain an exemption from or reduction of
the withholding tax (depending on the terms of the treaty) by providing a
properly completed IRS Form 1001 (Ownership, Exemption or Reduced Rate
Certificate).
"Exemption for United States Persons (IRS Form W-9)." A beneficial owner
of a note that is a United States person can obtain a complete exemption from
the withholding tax and the backup withholding tax of 31% by providing a
properly completed IRS Form W-9 (Request for Taxpayer Identification Number and
Certification).
"United States federal income tax reporting procedure." A beneficial owner
of a note, or, in the case of IRS Forms 1001 and 4224, its agent, is required
to submit the appropriate IRS Form under applicable procedures to the person
through which the owner directly holds the note. For example, if the beneficial
owner is listed directly on the books of Euroclear or Cedelbank as the holder
of the note, the IRS Form must be provided to Euroclear or Cedelbank, as the
case may be. Each other person through which a note is held must submit, on
behalf of the beneficial owner, the IRS Form (or in certain cases a copy
thereof) under applicable procedures to the person through which it holds the
note, until the IRS Form is received by the United States person who would
otherwise be required to withhold United States federal income tax from
interest on the note. For example, in the case of notes held through Euroclear
or Cedelbank, the IRS Form (or a copy thereof) must be received by the U.S.
Depositary of such clearing agency. Applicable procedures include additional
certification requirements, described below under "United States Taxation of
Non-United States Persons--Income and Withholding Tax", if a beneficial owner
of the note provides an IRS Form W-8 to a securities clearing organization,
bank or other financial institution that holds the note on its behalf.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. In
particular, the regulations will replace a number of the forms described above
with revised IRS Form W-8. Prospective investors should consult their tax
advisors regarding the certification requirements for non-United States
persons.
EACH HOLDER OF A NOTE SHOULD BE AWARE THAT IF IT DOES NOT PROPERLY
PROVIDE THE REQUIRED IRS FORM, OR IF THE IRS FORM (OR, IF PERMISSIBLE, A COPY
OF SUCH FORM) IS NOT PROPERLY TRANSMITTED TO AND RECEIVED BY THE UNITED STATES
PERSON OTHERWISE REQUIRED TO WITHHOLD UNITED STATES FEDERAL INCOME TAX,
INTEREST ON THE NOTE MAY BE SUBJECT TO UNITED STATES WITHHOLDING TAX AT A 30%
S-15
<PAGE>
RATE AND THE HOLDER (INCLUDING THE BENEFICIAL OWNER) WILL NOT BE ENTITLED TO
ANY ADDITIONAL AMOUNTS FROM ML&CO. DESCRIBED UNDER THE HEADING "DESCRIPTION OF
NOTES--PAYMENT OF ADDITIONAL AMOUNTS" WITH RESPECT TO SUCH TAX. SUCH TAX,
HOWEVER, MAY IN CERTAIN CIRCUMSTANCES BE ALLOWED AS A REFUND OR AS A CREDIT
AGAINST SUCH HOLDER'S UNITED STATES FEDERAL INCOME TAX. THE FOREGOING DOES NOT
DEAL WITH ALL ASPECTS OF FEDERAL INCOME TAX WITHHOLDING THAT MAY BE RELEVANT
TO NON-UNITED STATES HOLDERS OF THE NOTES. INVESTORS ARE ADVISED TO CONSULT
THEIR OWN TAX ADVISORS FOR SPECIFIC ADVICE CONCERNING THE OWNERSHIP AND
DISPOSITION OF NOTES.
UNITED STATES TAXATION OF NON-UNITED STATES PERSONS
Income and Withholding Tax
In the opinion of Brown & Wood LLP, counsel to ML&Co., under United
States federal tax law as of the date of this prospectus supplement, and
subject to the discussion of backup withholding below:
(1) payments of principal and interest on a note that is beneficially
owned by a non-United States person will not be subject to United States
federal withholding tax; "provided," that in the case of interest, (a):
. the beneficial owner does not actually or constructively own
10% or more of the total combined voting power of all classes
of stock of ML&Co. entitled to vote,
. the beneficial owner is not a controlled foreign corporation
that is related to ML&Co. through stock ownership, and
. either
. the beneficial owner of the note certifies to the person
otherwise required to withhold United States federal income tax
from such interest, under penalties of perjury, that it is not
a United States person and provides its name and address or
. a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and
holds the note certifies to the person otherwise required to
withhold United States federal income tax from such interest,
under penalties of perjury, that such statement has been
received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes
the payor with a copy thereof;
(b) the beneficial owner is entitled to the benefits of an income tax
treaty under which the interest is exempt from United States
federal withholding tax and the beneficial owner of the note or
such owner's agent provides an IRS Form 1001 claiming the
exemption; or
(c) the beneficial owner conducts a trade or business in the United
States to which the interest is effectively connected and the
beneficial owner of the note or such owner's agent provides an
IRS Form 4224; provided that in each such case, the relevant
certification or IRS Form is delivered pursuant to applicable
procedures and is properly transmitted to the person otherwise
required to withhold United States federal income tax, and none
of the persons receiving the relevant certification or IRS Form
has actual knowledge that the certification or any statement on
the IRS Form is false;
(2) a non-United States person will not be subject to United States
federal income tax on any gain realized on the sale, exchange or
redemption of a note unless the gain is effectively connected with the
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<PAGE>
beneficial owner's trade or business in the United States or, in the case
of an individual, the holder is present in the United States for 183 days
or more in the taxable year in which the sale, exchange or redemption
occurs and certain other conditions are met; and
(3) a note owned by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to United
States federal estate tax as a result of such individual's death if the
individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of ML&Co. entitled to
vote and the income on the note would not have been effectively connected
with a U.S. trade or business of the individual.
Interest on a note that is effectively connected with the conduct of a
trade or business in the United States by a holder of a note who is a non-
United States person, although exempt from United States withholding tax, may
be subject to United States income tax as if such interest was earned by a
United States person.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to payments of
principal and interest made on a note and the proceeds of the sale of a note
within the United States to non-corporate holders of the notes, and "backup
withholding" at a rate of 31% will apply to such payments if the holder fails
to provide an accurate taxpayer identification number in the manner required
or to report all interest and dividends required to be shown on its federal
income tax returns.
Information reporting on IRS Form 1099 and backup withholding will not
apply to payments made by ML&Co. or a paying agent to a non-United States
person on a note if, in the case of interest, the IRS Form described in
clauses (b) or (c) in paragraph (1) under "Income and Withholding Tax" has
been provided under applicable procedures, or, in the case of interest or
principal, the certification described in clause (1)(a) under "Income and
Withholding Tax" and a certification that the beneficial owner satisfies
certain other conditions have been supplied under applicable procedures,
provided that the payor does not have actual knowledge that the certifications
are incorrect.
Payments of the proceeds from the sale of a note made to or through a
foreign office of a broker will generally not be subject to information
reporting or backup withholding. However, information reporting may apply to
such payments if the broker is (i) a United States person, (ii) a controlled
foreign corporation for United States tax purposes, (iii) a foreign person 50%
or more of whose gross income is effectively connected with a United States
trade or business for a specified three-year period, or (iv) effective
beginning January 1, 2000, a foreign partnership if, at any time during its
tax year, one or more partners are United States persons who, in the
aggregate, hold more than 50% of the income or capital interests in the
partnership or if, at any time during its tax year, such foreign partnership
is engaged in a United States trade or business. Payments of the proceeds from
the sale of a note to or through the United States office of a broker are
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies that it is a non-United States person and that it
satisfies certain other conditions or otherwise establishes an exemption from
information reporting and backup withholding.
Regulations recently issued by the IRS, which will be effective for
payments made after December 31, 1999, make certain modifications to the
certification procedures applicable to non-United States persons. Prospective
investors should consult their tax advisors regarding the certification
requirements for non-United States persons.
Backup withholding is not a separate tax, but is allowed as a refund or
credit against the holder's United States federal income tax, provided the
necessary information is furnished to the Internal Revenue Service.
Interest on a note that is beneficially owned by a non-United States
person will be reported annually on IRS Form 1042S, which must be filed with
the Internal Revenue Service and furnished to such beneficial owner.
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<PAGE>
UNDERWRITING
The underwriters named below have each severally agreed, subject to the
terms and conditions of the underwriting agreement dated August 5, 1998 and the
terms agreement dated as of February 9, 1999, to purchase from ML&Co. the
principal amount of notes set forth opposite their respective names. The
underwriters for the notes are committed to purchase all of the notes, if any
of such notes are purchased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................... $1,600,000,000
ABN AMRO Bank N.V. ......................................... 40,000,000
Chase Securities Inc. ...................................... 40,000,000
First Chicago Capital Markets, Inc. ........................ 40,000,000
First Union Capital Markets Corp............................ 40,000,000
Midland Bank plc............................................ 40,000,000
J.P. Morgan Securities Inc.................................. 40,000,000
NationsBanc Montgomery Securities LLC....................... 40,000,000
Paribas..................................................... 40,000,000
Salomon Smith Barney Inc.................................... 40,000,000
Tokyo-Mitsubishi International plc.......................... 40,000,000
--------------
Total.................................................. $2,000,000,000
==============
</TABLE>
The underwriters have advised ML&Co. that they propose initially to offer
all or part of the notes directly to the public at the offering price set forth
on the cover page of this prospectus supplement. After the initial public
offering, the public offering price may be changed.
Certain of the underwriters and their affiliates engage in transactions
with, and perform services for, ML&Co. in the ordinary course of business and
have engaged, and may in the future engage, in commercial banking and
investment banking transactions with ML&Co.
The underwriting of the notes will conform to the requirements set forth
in the applicable sections of Rule 2720 of the Conduct Rules of the NASD.
MLPF&S and Merrill Lynch International are permitted to engage in certain
transactions that stabilize the price of the notes. Such transactions consist
of bids or purchases for the purpose of pegging, fixing or maintaining the
market price of the notes.
If the underwriters create a short position in the notes in connection
with the offering, i.e., if they sell more notes than are set forth on the
cover page of this prospectus supplement, the underwriters may reduce that
short position by purchasing notes of in the open market.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the market price of the security to be
higher than it might be in the absence of such purchases. Neither ML&Co. nor
the underwriters makes any representation or prediction as to the direction or
magnitude of any effect that the transactions described above may have on the
market price of the notes. In addition, neither ML&Co. nor the underwriters
makes any representation that the underwriters will engage in such transactions
or that such transactions, once commenced, will not be discontinued without
notice.
MLPF&S may use this prospectus supplement and the accompanying prospectus
for offers and sales related to market-making transactions in the notes. MLPF&S
may act as principal or agent in these transactions, and the sales will be made
at prices related to prevailing market prices at the time of sale.
S-18
<PAGE>
The notes are offered for sale in those jurisdictions in the United
States, Europe and Asia where it is legal to make such offers. The distribution
of this prospectus supplement and the offering of the notes in certain
jurisdictions may be restricted by law. Persons into whose possession this
prospectus supplement and the prospectus come should inform themselves about
and observe any such restrictions. This prospectus supplement and the
prospectus do not constitute, and may not be used in connection with, an offer
or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation.
Each of the underwriters has represented and agreed that it has not and
will not offer, sell or deliver any of the notes directly or indirectly, or
distribute this prospectus supplement or the prospectus or any other offering
material relating to the notes, in or from any jurisdiction except under
circumstances that will result in compliance with the applicable laws and
regulations thereof and that will not impose any obligations on ML&Co. except
as set forth in the underwriting agreement.
In particular, each underwriter has represented and agreed that:
. it has not offered or sold and will not offer or sell any notes to
persons in the United Kingdom prior to the expiry of the period of
six months from the issue date of the notes except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purpose of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995;
. it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with
the issue of the notes to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or is a
person to whom such document may otherwise lawfully be issued or
passed on; and
. it has complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by
it in relation to any notes in, from or otherwise involving the
United Kingdom.
Although application has been made to list the notes on the Luxembourg
Stock Exchange, the notes are new issues of securities with no established
trading market. No assurance can be given as to the liquidity of, or the
trading markets for, the notes. Purchasers of the notes may be required to pay
stamp taxes and other charges in accordance with the laws and practices of the
country of purchase in addition to the issue price set forth on the cover page
hereof. ML&Co. has been advised by MLPF&S that it intends to make a market in
the notes, but they are not obligated to do so and may discontinue such market-
making at any time without notice.
It is expected that delivery of the notes will be made against payment
therefor on or about February 17, 1999, which is the fifth business day
following the date of this prospectus supplement (such settlement cycle being
herein referred to as "T+5"). Purchasers of notes should note that the ability
to settle secondary market trades of the notes effected on the date of pricing
and the succeeding business days may be affected by the T+5 settlement.
VALIDITY OF NOTES
The validity of the notes will be passed upon for ML&Co. by Brown & Wood
LLP, New York, New York, and for the underwriters by Sullivan & Cromwell, New
York, New York.
S-19
<PAGE>
GENERAL INFORMATION
Listing
Application has been made to list the notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Restated Certificate
of Incorporation and the By-Laws of ML&Co. and a legal notice relating to the
issuance of the notes have been deposited prior to listing with "Greffier en
Chef du Tribunal d'Arrondissement de et a Luxembourg," where copies thereof may
be obtained upon request. Copies of the above documents together with this
prospectus supplement, the accompanying prospectus, the 1983 Indenture and
ML&Co.'s annual report on Form 10-K for the year ended December 26, 1997 and
quarterly reports on Form 10-Q for the periods ended March 27, 1998, June 26,
1998 and September 25, 1998, as well as all future annual reports, quarterly
reports and financial current reports on Form 8-K, so long as any of the notes
are outstanding and listed on the Luxembourg Stock Exchange, will be made
available at the main office of Bankers Trust Luxembourg S.A. The underwriting
agreement and terms agreement will be available for inspection at Bankers Trust
Luxembourg S.A. Bankers Trust Luxembourg S.A. will act as intermediary between
the Luxembourg Stock Exchange and ML&Co. and the holders of the notes so long
as the notes are in global form.
The consolidated financial statements contained in ML&Co.'s 1997 Form 10-
K have been audited by Deloitte & Touche LLP.
Authorization
The notes will be issued pursuant to authority granted by the Board of
Directors of ML&Co. on February 24, 1986, October 23, 1995 and July 27, 1998,
by the Executive Committee of ML&Co. on September 16, 1991 and by the Audit and
Finance Committee of ML&Co. on December 7, 1998, as each such authority may be
supplemented from time to time.
Material Change
There has been no material adverse change in the financial position or
operations of ML&Co. and its subsidiaries on a consolidated basis since
December 26, 1997, except as disclosed herein or in the documents incorporated
by reference.
Litigation
Neither ML&Co. nor any subsidiary is involved in any legal or arbitration
proceedings, nor, to ML&Co.'s knowledge, are any legal or arbitration
proceedings pending or threatened involving ML&Co. or any subsidiary, which may
have or have had during the 12 months prior to the date of this prospectus
supplement a material effect on the financial position of ML&Co. and its
subsidiaries on a consolidated basis.
There are numerous civil actions, arbitration proceedings and claims
pending against ML&Co., some of which involve claims for substantial amounts as
described under the caption "Legal Proceedings" in ML&Co.'s 1997 annual report
on Form 10-K and in ML&Co.'s 1998 quarterly reports on Form 10-Qs which are
incorporated by reference herein. ML&Co. believes it has strong defenses to and
will vigorously contest these civil actions, arbitration proceedings and
claims. Although the ultimate outcome of such civil actions, arbitration
proceedings and claims described therein and other civil actions, arbitration
proceedings and claims pending against ML&Co. or its subsidiaries as of
February 9, 1999 cannot be ascertained at this time, and the results of legal
proceedings cannot be predicted with certainty, it is the opinion of the
management of ML&Co. that the resolution of these actions will not have a
material adverse effect on the financial position of ML&Co. and its
subsidiaries on a consolidated basis.
S-20
<PAGE>
Governing Law
The notes, the 1983 Indenture, the terms agreement and the underwriting
agreement are governed by, and shall be construed in accordance with, the laws
of the State of New York, United States of America, applicable to agreements
made and to be performed wholly within such jurisdiction.
Identification Numbers
The notes have been accepted for clearance through Euroclear and
Cedelbank (Common Code: 9485961; ISIN: US590188 JP48; CUSIP: 590188 JP4).
S-21
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PRINCIPAL OFFICE OF ML&CO.
World Financial Tower
North Tower
250 Vesey Street
New York, New York 10281
TRUSTEE AND REGISTRAR
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
LUXEMBOURG PAYING AGENT/TRANSFER AGENT
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
LISTING AGENT
Bankers Trust Luxembourg S.A.
14 Boulevard F.D. Roosevelt
L-2450
Luxembourg
LEGAL ADVISERS TO ML&CO. LEGAL ADVISERS TO THE UNDERWRITERS
As to United States Law: As to United States Law:
Brown & Wood LLP Sullivan & Cromwell
One World Trade Center 125 Broad Street
New York, New York 10048-0557 New York, New York 10004
AUDITORS TO ML&CO.
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
<PAGE>
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[LOGO]
$2,000,000,000
Merrill Lynch & Co., Inc.
6% Notes due February 17, 2009
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PROSPECTUS SUPPLEMENT
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Merrill Lynch & Co.
February 9, 1999
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