TYPE: 424B3
SEQUENCE: 1
DESCRIPTION: PRICING SUPPLEMENT No. 120 OF JP MORGAN-MTN PROGRAM
Pricing Supplement No. 120 Dated July 6, 1999 (To Prospectus Supplement
dated May 26, 1998 and Prospectus dated May 21, 1998)
Pursuant to Rule 424(b)(3)
Registration Statement No. 333-51961
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, NY 10260-0060
(212) 483-2323
Medium-Term Notes, Series A
(Fixed Rate Notes)
The Notes constitute shorter term debt securities issued in accordance with
regulations made under section 4 of the Banking Act 1987. The Issuer of the
Notes is J.P. Morgan & Co. Incorporated, which is not an authorized
institution or a European authorized institution (as such terms are defined
in the Banking Act 1987 (Exempt Transactions) Regulations 1997). Repayment
of the principal and payment of any interest or premium in connection with
the Notes has not been guaranteed by an authorized institution or a
European authorized institution.
Principal Amount: (pound)50,000,000
If principal amount is stated in other than U.S. dollars, equivalent amount
in U.S. dollars: $78,555,000
CUSIP: 61687Y EB9
Trade Date: July 6, 1999
Settlement Date: July 27, 1999
Maturity Date: July 6, 2001
Price to Public (Issue Price): 99.928% of principal amount
Net Proceeds to Issuer: (pound)49,964,000 (99.928%)
Interest Rate (per annum): 5.75%
Interest Payment Dates: Each January 6 and July 6, commencing January 6,
2000 (subject to Business Day convention described in the Prospectus
Supplement).
Record Date(s): (X) The fifteenth day (whether or not a Business Day) next
preceding each Interest Payment Date. ( ) Other:
Day Count Basis: ( ) 30/360
( ) Actual/360
(X) Other. Interest will be computed and paid on the
basis of the actual number of days in the period in respect of which
payment is being made divided by 365 (or, if any portion of that period
falls in a leap year, the sum of (A) the actual number of days in that
portion of the period falling in a leap year divided by 366 and (B) the
actual number of days in that portion of the period falling in a non-leap
year divided by 365).
Form: (X) Book-Entry Note (DTC) See "Book Entry System" and "Global
Clearance and Settlement Procedures" under "Additional Terms" below.
( ) Certificated Note
Redemption:
(X) The Notes may not be redeemed prior to stated maturity unless
certain events occur involving U.S. Taxation. See "Redemption for Tax
Reasons" under "Additional Terms" below.
( ) The Notes may be redeemed.
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Optional Redemption Date(s): N/A
Initial Redemption Date: N/A
Initial Redemption Percentage: N/A
Annual Redemption Percentage Reduction: N/A
Modified Payment Upon Acceleration: N/A
Sinking Fund: None
Right of Payment:
( ) Subordinated (X) Unsubordinated
Original Issue Discount: N/A
Amount of OID: N/A
Yield to Maturity: N/A
Interest Accrual Date: N/A
Initial Accrual Period OID: N/A
Amortization Schedule: N/A
Denominations: (pound)100,000 with (pound)100,000 integral multiples
thereafter.
Plan of Distribution:
The Notes will be sold to J.P. Morgan Securities Ltd. for sale to one
or more investors at a fixed public offering price. After the initial
public offering of the Notes, the public offering price and any concession
or discount may be changed. The Company has agreed to indemnify J.P. Morgan
Securities Ltd. against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
Additional Terms:
Issuance in Pounds Sterling
An investment in the Notes entails significant risks that are not
associated with investments in other Debt Securities. Such risks include,
without limitation, the possibility of significant changes in rates of
exchange between the U.S. Dollar and the United Kingdom Sterling and the
possibility of the imposition or modification of foreign exchange controls
by either the United States or foreign governments. Such risks generally
depend on factors over which the Company has no control. For example, the
exchange rates between the U.S. Dollar and the United Kingdom Sterling are
at any moment a result of the supply of, and demand for, each currency.
Changes in exchange rates result over time from the interaction of many
factors directly or indirectly affecting economic conditions in the United
States and the United Kingdom, as well as economic, military and political
developments in other countries. Of particular importance are rates of
inflation, interest rate levels, the balance of payments and the extent of
government surpluses and deficits in the respective countries, all of which
are in turn sensitive to the monetary, fiscal and trade policies pursued by
the governments in such countries and in other countries important to
international trade and finance.
Also, sovereign governments use a variety of techniques, such as
intervention by a country's central bank or imposition of regulatory
controls or taxes, to affect the level of interest rates and exchange rates
of their currencies. Governments may also issue a new currency to replace
an existing currency or alter the exchange rate or relative exchange
characteristics by devaluation or revaluation of a currency. Thus, a
special risk in purchasing the Notes is that governmental actions could
interfere with or change theretofore freely determined currency valuations
and fluctuations in market forces. There will be no adjustment or change in
the terms of the Notes in the event that exchange rates should become
fixed, or in the event of any devaluation or revaluation or imposition of
exchange or other regulatory controls or taxes, or in the event of other
developments affecting the U.S. Dollar or the United Kingdom Sterling.
The amounts in United Kingdom Sterling payable by the Paying Agent to DTC
with respect to the Notes held through DTC will be paid in United Kingdom
Sterling by wire transfer of same day funds to the designated United
Kingdom Sterling accounts of DTC participants entitled to receive the
relevant payment. The principal of and interest of the Notes will be
payable in United Kingdom Sterling. Holders of Notes will receive payment
of the principal of and interest on such Notes in United Kingdom Sterling,
outside DTC, and will have no right to elect to receive such payment in
U.S. dollars.
THIS PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND PROSPECTUS
SUPPLEMENT DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE NOTES. THE
COMPANY BELIEVES THAT THESE RISKS ARE POTENTIALLY TOO VARIABLE TO ASCERTAIN
AND DESCRIBE WITH ANY REASONABLE DEGREE OF CERTAINTY AND THAT PREPARATION
OF A LIST OF EVERY POTENTIAL MATERIAL RISK, INCORPORATING EVERY ECONOMIC,
FINANCIAL, POLITICAL AND MILITARY CIRCUMSTANCE, AMONG OTHER THINGS, WOULD
BE IMPRACTICAL. PROSPECTIVE INVESTORS SHOULD THEREFORE CONSULT THEIR OWN
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FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN
THE NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO
ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Exchange Rate Information
The following table sets forth, for the periods and dates indicated,
certain information regarding the Close Buying Rate for pounds sterling,
expressed in dollars per pound sterling as reported by Reuters.
Such rates are provided solely for the convenience of the reader and should
not be construed as a representation that sterling amounts actually
represent such dollar amounts or that such sterling amounts could have
been, or could be, converted into dollars at that rate or at any other
rate.
Calendar Year Average(a) High Low At Period End
- ------------- ---------- ---- --- -------------
1993.............................. $1.50 $1.59 $1.42 $1.48
1994.............................. 1.53 1.64 1.46 1.57
1995.............................. 1.58 1.64 1.53 1.55
1996.............................. 1.56 1.71 1.49 1.71
1997.............................. 1.64 1.70 1.58 1.64
1998.............................. 1.66 1.72 1.61 1.66
1999 (through June 30, 1999)...... 1.62 1.66 1.58 1.58
(a) The average of the Noon Buying Rates on the last business day of each
month (other than July 1999) during the relevant period. On July 6,
1999, the Close Buying Rate was $1.57 to (pound)1.00.
Book-Entry System
The Notes will be offered and sold in minimum denominations of 100,000 and
integral multiples thereof. The Notes will be issued in the form of one or
more fully registered Global Notes (the "Global Notes") which will be
deposited with, or on behalf of, The Depository Trust Company, New York,
New York (the "Depository" or "DTC") and registered in the name of Cede &
Co., the Depository's nominee. Beneficial interests in the Global Notes
will be represented through book-entry accounts of financial institutions
acting on behalf of beneficial owners as direct and indirect participants
in the Depository. Investors may elect to hold interests in the Global
Notes through either the Depository or Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System ("Euroclear") or
Cedelbank, if they are participants of such systems, or indirectly through
organizations which are participants in such systems. Euroclear and
Cedelbank will hold interests on behalf of their participants through
customers' securities accounts in Euroclear's and Cedelbank'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 Depository. The Chase Manhattan Bank will act as
depositary for Euroclear and Citibank, N.A. will act as depositary for
Cedelbank (in such capacities, the "U.S. Depositaries"). Except as set
forth below, the Global Notes may be transferred, in whole and not in part,
only to another nominee of the Depository or a successor of the Depository
or its nominee.
The Depository's 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." The Depository has informed
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 ("DTC Services"), continue to function appropriately.
This program includes a technical assessment and a remediation plan, each
of which is complete. Additionally, the Depository's plan includes a
testing phase, which is expected to be completed within appropriate time
frames. However, the Depository's ability to properly perform 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 the Depository
licenses software and hardware, and third party vendors on whom the
Depository relies for information or the provision of services, including
telecommunication and electrical utility service providers, among others.
Euroclear advises that it was created in 1968 to hold securities for its
participants ("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 provides 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 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
<PAGE>
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.
Cedelbank advises that it is incorporated under the laws of Luxembourg as a
professional depositary. Cedelbank holds securities for its participating
organizations ("Cedelbank Participants") and facilitates the clearance and
settlement of securities transactions between Cedelbank Participants
through electronic book-entry changes in accounts of Cedelbank
Participants, thereby eliminating the need for physical movement of
certificates. Cedelbank provides to Cedelbank 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. Cedelbank 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 Cedelbank Participant, either directly or indirectly.
Distributions with respect to the Notes held beneficially through Cedelbank
will be credited to cash accounts of Cedelbank Participants in accordance
with its rules and procedures, to the extent received by the U.S.
Depositary for Cedelbank.
So long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange require, the Company will appoint a
paying agent and transfer agent in Luxembourg (the "Luxembourg Paying and
Transfer Agent") and the holders of the Notes will be able to receive
payments thereon and effect transfers thereof at the offices of the
Luxembourg Paying and Transfer Agent.
Individual certificates in respect of Notes will not be issued in exchange
for the Global Notes, except in very limited circumstances. If Euroclear,
Cedelbank or DTC notifies the Company that it is unwilling or unable to
continue as a clearing system in connection with a Global Notes or, in the
case of DTC only, DTC ceases to be a clearing agency registered under the
Exchange Act, and in each case a successor clearing system is not appointed
by the Company within 90 days after receiving such notice from Euroclear,
Cedelbank or DTC or on becoming aware that DTC is no longer so registered,
the Company will issue or cause to be issued individual certificates in
registered form on registration of transfer of, or in exchange for,
book-entry interests in the Notes represented by such Global Notes upon
delivery of such Global Notes for cancelation.
Title to book-entry interests in the Notes will pass by book-entry
registration of the transfer within the records of Euroclear, Cedelbank or
DTC, as the case may be, in accordance with their respective procedures.
Book-entry interests in the Notes may be transferred within Euroclear and
within Cedelbank and between Euroclear and Cedelbank in accordance with
procedures established for these purposes by Euroclear and Cedelbank.
Book-entry interests in the Notes may be transferred within DTC in
accordance with procedures established for this purpose by DTC. Transfers
of book-entry interests in the Notes between Euroclear and Cedelbank and
DTC may be effected in accordance with procedures established for this
purpose by Euroclear, Cedelbank and DTC.
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 Depository rules and will be settled in
immediately available funds. Secondary market trading between Euroclear
Participants and/or Cedelbank Participants will occur in the ordinary way
in accordance with the applicable rules and operating procedures of
Euroclear and Cedelbank 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 Depository on the one hand, and directly or indirectly through
Euroclear or Cedelbank Participants, on the other, will be effected in the
Depository in accordance with the Depository 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. Depository to take action to
effect final settlement on
<PAGE>
its behalf by delivering or receiving Notes in the Depository, and making
or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to the Depository. Euroclear Participants and
Cedelbank Participants may not deliver instructions directly to their
respective U.S. Depositaries.
Because of time-zone differences, credits of Notes received in Euroclear or
Cedelbank as a result of a transaction with a DTC Participant will be made
during subsequent securities settlement processing and dated the business
day following the Depository settlement date. Such credits or any
transactions in such Notes settled during such processing will be reported
to the relevant Euroclear or Cedelbank Participants on such business day.
Cash received in Euroclear or Cedelbank as a result of sales of Notes by or
through a Euroclear Participant or a Cedelbank Participant to a DTC
Participant will be received with value on the Depository settlement date
but will be available in the relevant Euroclear or Cedelbank cash account
only as of the business day following settlement in the Depository.
Although the Depository, Euroclear and Cedelbank have agreed to the
foregoing procedures in order to facilitate transfers of Notes among
participants of the Depository, Euroclear and Cedelbank, they are under no
obligation to perform or continue to perform such procedures and such
procedures may be changed or discontinued at any time.
Payments of Additional Amounts
The Company 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 the Company 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,
settler, 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 the
Company 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 the
ordinary course of its trade or business;
(2) to any holder that is not the sole beneficial owner of the
Notes, or a portion thereof, or that is a fiduciary or partnership,
but only to the extent that a beneficiary or settler 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, settler, beneficial owner or member received directly its
beneficial or distributive share of the payment;
(3) to any tax, assessment or other governmental charge that is
imposed otherwise or withheld solely by reason of a 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 Notes, if compliance is
required by statute, by regulation or 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 the Company 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 Notes, if such payment can be made without such
withholding by any other paying agent; or
<PAGE>
(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 hereto.
Except as specifically provided under this heading "--Payment of Additional
Amounts" and under the heading "--Redemption for Tax Reasons", the Company
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
heading "--Redemption for Tax Reasons", the term "United States" means the
United States of America (including the States and the District of
Columbia) and its territories, 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
pricing supplement, the Company becomes or, based upon a written opinion of
independent counsel selected by the Company, will become obligated to pay
additional amounts as described herein under the heading "--Payment of
Additional Amounts" with respect to the Notes, then the Company may, at its
option redeem, in 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.
Notice to Holders
Application has been made to list the Notes on the Luxembourg Stock
Exchange. Notices to holders of the Notes will be given at least once by
publication in one daily newspaper in the English language of general
circulation in London (which is expected to be the Financial Times), and,
so long as the Notes are listed on the Luxembourg Stock Exchange and the
rules of the Luxembourg Stock Exchange require, in a daily newspaper of
general circulation in Luxembourg (which is expected to be Luxemburger
Wort). If publication in either London or Luxembourg is impractical in the
opinion of J.P. Morgan, notices shall be published by such means as will,
so far as may be reasonably practicable, approximate publication in such
newspaper. Such notices will be deemed to have been given on the date of
such publication or, if published more than once, on the date of the first
publication.
CAPITALIZED TERMS USED IN THIS PRICING SUPPLEMENT WHICH ARE DEFINED IN THE
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS SHALL HAVE THE MEANINGS ASSIGNED TO
THEM IN THE PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
