<PAGE> 1
Filed Pursuant to Rule 424(B)(4)
Registration No. 333-88509
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 1, 1999)
TEXTRON FINANCIAL CORPORATION
$400,000,000
Floating Rate Notes due December 9, 2002
Interest payable March 9, June 9, September 9 and December 9
ISSUE PRICE: 100%
$600,000,000
7 1/8% Notes due December 9, 2004
Interest payable June 9 and December 9
ISSUE PRICE: 99.496%
The floating rate notes will mature on December 9, 2002. Interest will accrue
from December 9, 1999. The per annum rate of interest will equal three-month
LIBOR, reset quarterly, plus 35 basis points (.35%). Interest will be computed
on the basis of a 360-day year and the actual number of days in the applicable
interest period. Interest is payable quarterly on March 9, June 9, September 9
and December 9 of each year, commencing March 9, 2000. The floating rate notes
will not be redeemable prior to maturity unless certain events occur involving
U.S. taxation.
The fixed rate notes will mature on December 9, 2004. Interest will accrue from
December 9, 1999, at the rate of 7 1/8% per annum. Interest is payable
semiannually on June 9 and December 9 of each year, commencing June 9, 2000. The
fixed rate notes will not be redeemable prior to maturity unless certain events
occur involving U.S. taxation.
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 prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
PRICE TO DISCOUNTS AND PROCEEDS TO TEXTRON
PUBLIC COMMISSIONS FINANCIAL CORPORATION
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per floating rate note 100% .250% 99.750%
- -----------------------------------------------------------------------------------------------------------------
Total $400,000,000 $1,000,000 $399,000,000
- -----------------------------------------------------------------------------------------------------------------
Per 7 1/8% note 99.496% .350% 99.146%
- -----------------------------------------------------------------------------------------------------------------
Total $596,976,000 $2,100,000 $594,876,000
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
We have applied to list the notes on the Luxembourg Stock Exchange. We also have
applied to list the notes on the New York Stock Exchange.
We expect that delivery of the notes will be made to investors on or about
December 9, 1999 only through The Depository Trust Company, Cedelbank and
Euroclear.
Joint Bookrunners
MERRILL LYNCH & CO. J.P. MORGAN & CO.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
SALOMON SMITH BARNEY
WARBURG DILLON READ LLC
December 2, 1999
<PAGE> 2
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Textron Financial Corporation................ S-3
Description of Textron Inc.................................. S-4
Description of Support Agreement............................ S-4
Use of Proceeds............................................. S-5
Consolidated Capitalization of Textron Financial
Corporation............................................... S-5
Selected Consolidated Financial Data of Textron Financial
Corporation............................................... S-6
Directors and Executive Officers of Textron Financial
Corporation............................................... S-7
Description of Notes........................................ S-9
U.S. Federal Taxation....................................... S-16
Underwriting................................................ S-20
General and Listing Information............................. S-21
Documents Incorporated by Reference......................... S-22
Legal Opinions.............................................. S-22
PROSPECTUS
About this Prospectus....................................... 1
Textron Financial Corporation............................... 1
Use of Proceeds............................................. 2
Ratio of Earnings to Fixed Charges.......................... 2
Description of Debt Securities.............................. 2
Plan of Distribution........................................ 12
Where You Can Find More Information......................... 13
Legal Opinions.............................................. 14
Experts..................................................... 14
</TABLE>
We have not, and the underwriters have not, authorized any other person to
provide you with any information or to make any representations not contained in
this prospectus supplement or the attached prospectus. 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 of any securities other than
the notes. This prospectus supplement is part of, and you must read it in
addition to, the attached prospectus dated December 1, 1999. You should assume
that the information appearing in this prospectus supplement and the attached
prospectus, as well as the information incorporated by reference, is accurate as
of the date on the front cover of this prospectus supplement only.
The distribution of this prospectus supplement and the attached prospectus, and
the offering of the notes, may be restricted by law in certain jurisdictions.
You should inform yourself about, and observe, any of these restrictions. This
prospectus supplement and the attached prospectus do not constitute, and may not
be used in connection with, an offer or solicitation by anyone in any
jurisdiction in which the offer or solicitation is not authorized, or in which
the person making the offer or solicitation is not qualified to do so, or to any
person to whom it is unlawful to make the offer or solicitation.
This prospectus supplement and the attached prospectus include particulars given
in compliance with the rules governing the listing of securities on the
Luxembourg Stock Exchange. We accept full responsibility for the accuracy of the
information contained in this prospectus supplement and the attached prospectus.
We confirm, having made all reasonable inquiries, that to the best of our
knowledge and belief there are no other facts that we have omitted that make any
statement contained in this prospectus supplement and attached prospectus
misleading.
References in this prospectus supplement and the attached prospectus to
"dollars" and "$" are to United States dollars.
This prospectus supplement and the attached prospectus, together with the
documents incorporated in them by reference, will be available free of charge at
the office of Kredietbank S.A. Luxembourg. You may also review this prospectus
supplement and the attached prospectus, together with the documents incorporated
by reference into the prospectus, at the New York Stock Exchange's library.
S-2
<PAGE> 3
DESCRIPTION OF TEXTRON FINANCIAL CORPORATION
GENERAL
Textron Financial Corporation was incorporated on February 5, 1962 in the State
of Delaware. We are a diversified commercial finance company with operations in
three active segments:
- term loans and leases;
- revolving credit; and
- specialty finance.
Our term lending and leasing activity focuses on aircraft, equipment and golf
finance. Our revolving credit products consist primarily of dealer inventory
finance, factoring and working capital loans. Our specialty finance operations
include broadcast media finance, franchise finance, resort receivables finance
and structured investment grade transactions. The company's other financial
services and products include:
- transaction syndication;
- equipment appraisal and management;
- portfolio servicing; and
- insurance brokerage.
Since our inception, Textron Inc., a multi-industry company with operations in
aircraft, automotive, industrial and finance, has owned all of our stock. We
were organized to finance the distribution of Textron Inc.'s products. However,
we have progressively diversified the scope of the financial services that we
offer. As of September 30, 1999, approximately 24% of our managed finance
receivables related to Textron Inc.'s products. We have full recourse to Textron
Inc. on approximately three-quarters of the managed receivables related to
Textron Inc.'s products.
We limit our financing activities almost exclusively to commercial markets and
to lease and secured lending products. We offer our services primarily in North
America and, to a minor extent, in South America, Europe, and Australia.
However, we do finance Textron Inc.'s products, principally Bell helicopters and
Cessna aircraft, worldwide.
We operate approximately 29 offices nationwide, with division offices and
operation centers in or around Tempe, AZ; East Hartford, CT; Atlanta, GA;
Portland, OR; Columbus, OH; King of Prussia, PA; Wichita, KS; Williamstown, MA;
Minneapolis, MN; Providence, RI; and Ft. Worth, TX. Our principal executive
offices are located at 40 Westminster Street, Providence, RI 02903.
S-3
<PAGE> 4
RECENT ACQUISITIONS
We have grown through a combination of internal expansion and selective
acquisitions. These acquisitions were, and we expect future acquisitions will
be, complementary to our principal business segments. Acquired businesses must
offer meaningful transaction origination capabilities and credit standards
compatible with our standards and, when integrated with us, must meet certain
return on investment standards established by Textron Inc. We completed six
significant acquisitions within the last two years. They are as follows:
<TABLE>
<CAPTION>
ASSETS
DATE NAME TYPE ACQUIRED PRIMARY BUSINESS
- ---- ---------------------------- ------ ------------ -------------------------------
<S> <C> <C> <C> <C>
February 1998 Systran Financial Services Stock $ 68 million Factoring
December 1998 Business Leasing Group Assets $186 million Small ticket equipment leasing
March 1999 Southern Capital Corporation Assets $ 53 million Specialized equipment financing
July 1999 RFC Capital Stock $ 65 million Factoring
October 1999 Green Tree Financial Assets $432 million Aircraft and franchise finance
November 1999 Litchfield Financial Stock $610 million Resort receivables and other
receivables oriented
transactions
</TABLE>
DESCRIPTION OF TEXTRON INC.
Textron Inc. is a global, multi-industry company with operations in four
business segments -- aircraft, automotive, industrial and finance. Textron
Inc.'s products include commercial and military helicopters, light and mid-size
business jets, plastic fuel tanks, automotive trim products, golf cars and
utility vehicles, turf-care equipment, industrial pumps and gears, engineered
fastening systems and solutions and other industrial products. Textron Inc. also
is a leading commercial finance company for select markets.
Textron Inc. is a Delaware corporation. Textron Inc.'s principal executive
offices are located at 40 Westminster Street, Providence, Rhode Island 02903 and
its telephone number is (401) 421-2800.
Textron Inc. files annual, quarterly and special reports, proxy statements and
other information with the SEC. Copies of these reports, statements and other
information are available to you as described under "Where You Can Find More
Information" in the attached prospectus.
DESCRIPTION OF SUPPORT AGREEMENT
We entered into a Support Agreement dated as of May 25, 1994 with Textron Inc.
The Support Agreement requires Textron Inc. to pay us, quarterly, an amount
sufficient to provide that pre-tax earnings, before extraordinary items and
fixed charges, will not be less than 125% of our fixed charges. Fixed charges
for purposes of the Support Agreement include interest on indebtedness and
amortization of debt discount. Textron Inc. was not required to make any
payments under the Support Agreement for the nine months ended September 30,
1999, or for the years ended 1998, 1997, 1996, 1995 and 1994, when our fixed
charge coverage ratios were 170%, 173%, 171%, 165%, 160% and 172%, respectively.
In addition, Textron Inc. has agreed to maintain our consolidated shareholder's
equity at an amount not less than $200 million. Under the terms of the Support
Agreement, we agree with Textron Inc. that 100% of our issued and outstanding
common stock will be owned by Textron Inc. or a corporation controlled by,
controlling, or under common control with, Textron Inc. The Support Agreement is
not a guarantee by Textron Inc. of the payment of interest or principal of any
obligation, indebtedness or liability by us, including the notes that we are
offering by this prospectus supplement. However, the Support Agreement does
contain provisions protecting our investors from the termination of the Support
Agreement and entitling them to enforce its provisions against Textron Inc. As a
result, if Textron Inc. does not comply with its obligations under the Support
Agreement, holders of our debt securities, including the notes that we are
offering by this prospectus supplement, and other creditors could bring an
action against Textron Inc. to compel Textron Inc. to comply with its
obligations.
S-4
<PAGE> 5
USE OF PROCEEDS
We will receive from the offering of the notes net proceeds before expenses of
$993,876,000. We estimate expenses of $1,100,000. We will use the net proceeds
to repay outstanding commercial paper. Our outstanding commercial paper, as of
November 24, 1999, had a weighted average yield of 5.56% and weighted average
maturity of 26 days. We have used the net proceeds from the portion of our
outstanding commercial paper that will be repaid for working capital.
CONSOLIDATED CAPITALIZATION OF TEXTRON FINANCIAL CORPORATION
The following table sets forth our consolidated capitalization at September 30,
1999 and as adjusted for the offering of the notes. You should read the table
with our consolidated financial statements and related notes that are
incorporated by reference into the attached prospectus. See "Where You Can Find
More Information" in the attached prospectus. All amounts are in thousands of
U.S. dollars. Since September 30, 1999, no material change has occurred in our
consolidated capitalization.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
------------------------
HISTORICAL ADJUSTED
---------- ----------
<S> <C> <C>
DEBT
Commercial paper and short-term debt(1)................... $1,177,331 $ 184,555
Floating Rate Notes due December 9, 2002.................. -- 400,000
7 1/8% Notes due December 9, 2004......................... -- 600,000
Other long-term notes..................................... 2,425,500 2,425,500
---------- ----------
Total debt........................................ $3,602,831 $3,610,055
========== ==========
SHAREHOLDER'S EQUITY
Common stock, $100 par value; 4,000 shares authorized,
2,500 shares issued and outstanding.................... $ 250 $ 250
Capital surplus........................................... 188,976 188,976
Retained earnings......................................... $ 339,441 $ 339,441
---------- ----------
Total shareholder's equity(2)..................... $ 528,667 $ 528,667
========== ==========
</TABLE>
- ---------------
(1) As of November 24, 1999, the outstanding face amount of our commercial paper
and short-term debt outstanding was $1.892 billion.
(2) As of November 1, 1999, our total shareholder's equity was $845 million.
S-5
<PAGE> 6
SELECTED CONSOLIDATED FINANCIAL DATA
OF TEXTRON FINANCIAL CORPORATION
The following table sets forth selected financial data that we derived from the
audited consolidated financial statements of Textron Financial Corporation for
each of the three years in the period ended January 2, 1999 and from unaudited
financial statements for the nine months ended September 30, 1999 and 1998. We
believe that we have made all adjustments necessary for the fair presentation of
our unaudited financial data. The results for the interim period ended September
30, 1999 are not necessarily indicative of the results for the full year. Our
year-end dates conform with Textron Inc.'s year-end, which falls on the nearest
Saturday to December 31st. All interim periods are calendar month-end. All
amounts are in thousands of U.S. dollars, except for percentages. You should
read the following information with the consolidated financial statements and
related notes incorporated by reference in the attached prospectus. See "Where
You Can Find More Information" in the attached prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
----------------------------- --------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1998 1997 1996 1995 1994
------------- ------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
Finance charges and discounts.... $ 270,036 $ 223,053 $ 297,091 $ 290,943 $ 281,830 $ 271,580 $ 237,634
Rental revenues on operating
leases......................... 11,926 13,011 17,181 18,664 19,071 20,859 20,841
Other income..................... 39,943 38,705 52,890 40,613 26,346 18,777 18,692
Net income....................... 58,110 51,939 69,576 67,741 58,339 54,447 51,141
BALANCE SHEET DATA
Total finance receivables........ $4,424,033 $3,098,812 $3,611,397 $3,069,123 $3,172,824 $2,967,569 $2,786,891
Reserve for losses............... 89,208 79,148 83,887 77,394 74,824 74,769 69,981
Operating lease equipment, net... 105,785 121,747 118,590 111,518 127,691 124,728 136,135
Total assets..................... 4,683,849 3,234,972 3,784,538 3,177,965 3,269,141 3,060,521 2,910,841
Commercial paper & short-term
debt........................... 1,177,331 961,629 1,424,872 1,073,665 1,014,613 1,009,761 940,371
Long-term notes.................. 2,425,500 1,338,945 1,403,958 1,290,903 1,426,783 1,266,911 1,220,778
Deferred income taxes............ 336,986 313,028 321,521 319,293 315,366 302,741 293,532
Shareholder's equity............. 528,667 428,715 472,452 405,876 411,715 382,476 354,629
External debt to shareholder's
equity......................... 6.81x 5.37x 5.99x 5.83x 5.93x 5.95x 6.09x
SELECTED DATA AND RATIOS
PROFITABILITY
Net interest margin as a
percentage of average net
investment(1).................. 6.66% 6.93% 6.88% 6.51% 6.15% 5.98% 6.32%
Return on equity................. 15.69% 16.29% 16.2% 16.8% 14.8% 14.8% 15.0%
Return on average assets(2)...... 1.87% 2.08% 2.06% 2.07% 1.84% 1.82% 1.85%
Ratio of earnings to fixed
charges........................ 1.69x 1.72x 1.72x 1.70x 1.65x 1.60x 1.72x
Salaries and administrative
expenses as a percentage of
average managed
receivables(3)................. 1.78% 1.72% 1.73% 1.54% 1.65% 1.59% 1.66%
CREDIT QUALITY
60+ days contractual delinquency
as a percentage of finance
receivables(4)................. 1.12% 0.91% 0.87% 0.86% 0.75% 2.52% 0.93%
Nonperforming assets as a
percentage of finance assets... 1.9% 2.5% 2.3% 3.1% 3.6% 4.1% 4.7%
Reserves for losses as a
percentage of finance
receivables.................... 2.0% 2.6% 2.3% 2.5% 2.4% 2.5% 2.5%
</TABLE>
- ---------------
(1) Represents revenues earned less interest expense on borrowings as a
percentage of average net investment. Average net investment includes
finance receivables plus operating leases less deferred taxes on leveraged
leases.
(2) Average assets include finance receivables less allowance for loan loss,
operating leases and other assets. Investments in leveraged leases are not
net of deferred taxes.
(3) Average managed receivables include owned receivables plus receivables
serviced under securitizations, participations and third party portfolio
servicing agreements.
(4) Delinquency excludes captive receivables with recourse to Textron Inc.
Captive receivables represent third party finance receivables originated in
connection with the sale or lease of Textron Inc.'s manufactured products.
S-6
<PAGE> 7
DIRECTORS AND EXECUTIVE OFFICERS
OF TEXTRON FINANCIAL CORPORATION
The directors and executive officers of our company are as follows:
DIRECTORS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Edward C. Arditte.............. 44 Director since May 1997. Vice President and Treasurer of
Textron Inc. since 1997. Vice President Finance and
Business Development, Textron Fastening Systems, from 1995
to 1997, and Vice President -- Communications and Risk
Management of Textron Inc. from 1994 to 1995.
Lewis B. Campbell.............. 53 Director since January 1993. Chairman and Chief Executive
Officer of Textron Inc. since 1999. President and Chief
Executive Officer from 1998 to 1999. President and Chief
Operating Officer of Textron Inc. from 1994 to 1998.
Stephen A. Giliotti............ 51 Director since December 1994. Chairman, President and Chief
Executive Officer of Textron Financial Corporation since
1999. President from 1995 to 1999. Executive Vice President
and Chief Operating Officer from 1994 to 1995.
John A. Janitz................. 57 Director since May 1999. President and Chief Operating
Officer of Textron Inc. since 1999. Chairman, President and
Chief Executive Officer of Textron Automotive Company from
1996 to 1999. Executive Vice President, General Manager,
Occupant Restraint, Seat Belt and Fasteners of TRW, Inc.
from 1990 to 1996.
Wayne W. Juchatz............... 53 Director since May 1995. Executive Vice President and
General Counsel of Textron Inc. since 1995. Executive Vice
President, General Counsel and Secretary of RJ Reynolds Co.
from 1994 to 1995.
</TABLE>
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Stephen A. Giliotti............ 51 Chairman, President and Chief Executive Officer since 1999.
President from 1995 to 1999. Executive Vice President and
Chief Operating Officer from 1994 to 1995.
Buell J. Carter................ 53 Executive Vice President and Chief Operating Officer since
1999. Senior Vice President -- Operations from 1997 to
1999. Vice President, Division Manager, Asset Based Finance
from 1991 to 1997.
Andrew M. Chester.............. 45 Executive Vice President -- Human Resources since 1999.
Senior Vice President, Human Resources from 1998 to 1999.
Vice President, Human Resources from 1989 to 1998.
Thomas J. Cullen............... 43 Executive Vice President and Chief Financial Officer since
1999. Senior Vice President and Chief Financial Officer
from 1997 to 1999. Senior Vice President, Finance from 1995
to 1997. Vice President and Controller from 1992 to 1995.
O. Lewis Humphrey.............. 52 Executive Vice President and Chief Credit Officer since
1999. Senior Vice President and Chief Credit Officer from
1995 to 1999. Vice President, Corporate Investment Control
from 1991 to 1995.
</TABLE>
S-7
<PAGE> 8
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
John W. Mayers, Jr............. 45 Executive Vice President -- Corporate Development since
1999. Vice President, Risk Management and Insurance for
Textron Inc. from 1997 to 1999. Director, Risk Management
and Insurance for Textron Inc. from 1993 to 1997.
Elizabeth C. Perkins........... 45 Executive Vice President, General Counsel and Secretary
since 1999. Senior Vice President, General Counsel and
Secretary from 1994 to 1999.
David A. Raspallo.............. 40 Executive Vice President and Chief Information Officer
since 1999. Senior Vice President and Chief Information
Officer from 1998 to 1999. Vice President, Financial
Segments TFC/AFS 1998. Vice President, Information Systems
from 1993 to 1998.
Dan R. McCullough.............. 55 Senior Vice President -- Operations since 1995. Vice
President Vendor Finance and Floorplan Finance from 1991 to
1995.
Richard H. Mitterling.......... 52 Senior Vice President -- Operations since 1998. Vice
President, Division Manager, Resort Receivable Division
from 1994 to 1998.
Ronald W. Oake................. 55 Senior Vice President -- Operations since 1999. Vice
President, Division Manager, Floorplan Finance Division
from 1998 to 1999. General Manager of Avco Financial
Services from 1995 to 1998. Vice President, Operations,
Floorplan Finance Division from 1992 to 1995.
Richard A. Stratton............ 49 Senior Vice President -- Operations since 1999. Chief
Executive Officer of Litchfield Financial Corporation from
1996 to 1999. President of Litchfield Financial Corporation
from 1988 to 1996.
Barry L. Elfstrom.............. 47 Vice President, Controller Financial Reporting since 1999.
Vice President and Controller or Assistant Controller from
1986 to 1999.
Brian F. Lynn.................. 40 Vice President and Treasurer since 1999. Vice President,
Division Manager, Vendor Finance Division from 1996 to
1999. Vice President and Treasurer from 1994 to 1996.
Eric Salander.................. 40 Vice President, Finance since 1999. Vice President,
Strategic Planning from 1996 to 1999. Vice President
Administration for AAA Southern New England from 1995 to
1996. Manager Ernst & Young from 1989 to 1995.
Kathleen A. Smith.............. 50 Vice President, Tax since 1998. Assistant Vice President,
Tax from 1996 to 1998. Senior Manager of Tax for Lefkowitz,
Garfunkel, Champi & DiRenzo from 1992 to 1996.
</TABLE>
S-8
<PAGE> 9
DESCRIPTION OF NOTES
GENERAL
The following is a description of the particular terms of the Floating Rate
Notes due December 9, 2002 (the "Floating Rate Notes") and the 7 1/8% Notes due
December 9, 2004 (the "7 1/8% Notes" and, with the Floating Rate Notes, the
"Notes") that we are offering. This description supplements, and to the extent
inconsistent replaces, the description of the general terms and provisions of
the debt securities set forth in the accompanying prospectus. The Notes are part
of the debt securities that we registered on December 1, 1999 to be issued on
terms to be determined at the time of sale.
We will issue the Floating Rate Notes in an aggregate principal amount initially
of $400,000,000. We will issue the 7 1/8% Notes in an aggregate principal amount
initially of $600,000,000. We may issue, from time to time, additional Notes as
described below. We will issue the Notes pursuant to an indenture dated as of
December 9, 1999, which is more fully described in the attached prospectus. Our
officers authorized and approved the issuance of the Notes pursuant to a
resolution of our Board of Directors dated November 3, 1999.
The indenture and the Notes provide that they are governed by, and construed in
accordance with, the laws of the State of New York, United States.
The Floating Rate Notes will mature on December 9, 2002 and the 7 1/8% Notes
will mature on December 9, 2004. We are not permitted to redeem the Notes prior
to maturity unless certain events occur involving U.S. taxation. See "Redemption
for Tax Reasons."
FLOATING RATE NOTES
The Floating Rate Notes will bear interest at a rate per annum, reset quarterly,
equal to three-month LIBOR plus 35 basis points (.35%), as determined by the
calculation agent referred to below. Interest will be computed on the basis of a
360-day year and the actual number of days in the applicable interest period, as
defined below. Interest is payable quarterly on each March 9, June 9, September
9 and December 9, commencing March 9, 2000. Interest is payable for the period
commencing on and including the immediately preceding interest payment date and
ending on and including the day preceding the next interest payment date (an
"Interest Period"), with the exception that the first Interest Period will
commence on and include December 9, 1999. We will pay interest to the persons in
whose names the Floating Rate Notes are registered at the close of business on
the fifteenth calendar day prior to the interest payment date. However, interest
that we pay at maturity will be payable to the person to whom the principal will
be payable.
If any interest payment date, other than at maturity, for the Floating Rate
Notes would otherwise be a day that is not a Business Day (as defined below),
the interest payment date will be postponed to the next day that is a Business
Day, except that if the Business Day is in the next succeeding calendar month,
the interest payment date will be the immediately preceding Business Day. If the
maturity or any redemption date for the Floating Rate Notes falls on a day that
is not a Business Day, payment of principal and interest with respect to the
Floating Rate Notes will be paid on the next succeeding Business Day with the
same force and effect as if made on that date and no interest on the payment
will accrue from and after that date.
The interest rate for each Interest Period will be determined by SunTrust Bank,
Atlanta, as calculation agent in accordance with the following provisions:
The per annum rate of interest for each Interest Period will be three-month
LIBOR on the second Business Day preceding the relevant Interest Reset Date (as
defined below) for the Interest Period (the "Interest Determination Date") plus
the applicable spread described above. The Interest Determination
S-9
<PAGE> 10
Date for the first Interest Period will be December 7, 1999. "LIBOR" for each
subsequent Interest Period will be determined by the calculation agent in
accordance with the following provisions:
(1) On each Interest Determination Date, the calculation agent will
determine LIBOR as the offered rate for three-month deposits in U.S.
dollars in the London interbank market, which appears on Telerate Page 3750
as of 11:00 a.m., London time, on the Interest Determination Date.
(2) If the rate does not appear on Telerate Page 3750, or Telerate
Page 3750 is unavailable, the calculation agent will request each of four
major reference banks in the London interbank market to provide the
calculation agent with its offered quotation, expressed as a rate per
annum, for three-month deposits in U.S. dollars to leading banks in the
London interbank market at approximately 11:00 a.m., London time, on the
Interest Determination Date, in a principal amount of not less than
$1,000,000, that is representative for a single transaction in U.S. dollars
in that market at that time. If at least two quotations from the major
reference banks are provided, LIBOR in respect of the Interest
Determination Date will be the arithmetic mean of those quotations.
(3) If less than two of the major reference banks in the London
interbank market provide the calculation agent with the offered quotations,
LIBOR in respect of that Interest Determination Date will be the arithmetic
mean of the rates quoted by three major banks in New York City selected by
the calculation agent, at approximately 11:00 a.m., New York City time, on
that Interest Determination Date for three-month loans in U.S. dollars to
leading European banks, in a principal amount equal to an amount of not
less than $1,000,000, that is representative for a single transaction in
that market at that time.
(4) If the major banks in New York City selected by the calculation
agent are not quoting as described in clause (3), LIBOR will be LIBOR in
effect on the Interest Determination Date.
"Business Day" means any day, other than a Saturday or Sunday, on which banking
institutions in New York City are open for business and which is also a London
Banking Day.
"Interest Reset Date" means, with respect to any Interest Period, the first day
of such Interest Period.
"London Banking Day" means any day, other than a Saturday or Sunday, on which
commercial banks are open for business, including dealings in U.S. dollars, in
London.
"Telerate Page 3750" means the display designated as page "3750" on the Dow
Jones Telerate Service, or any other page as may replace that page on that
service for the purpose of displaying the LIBOR Index on a daily basis.
All percentages resulting from any calculation on the Floating Rate Notes will
be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and U.S.
dollar amounts used in or resulting from such calculations will be rounded to
the nearest cent, with one-half cent being rounded upward.
We have agreed that, so long as any of the Floating Rate Notes remain
outstanding, we will maintain under appointment a calculation agent to calculate
the rate of interest payable on the Floating Rate Notes in respect of each
Interest Period. The calculation agent's calculation of the rate of interest
payable on the Floating Rate Notes, will be conclusive and binding on us and the
holders of the Floating Rate Notes, absent manifest error. If the calculation
agent is unable or unwilling to continue to act as calculation agent, or if the
calculation agent fails to establish the applicable rate of interest for any
Interest Period, or if we remove the calculation agent, we will appoint another
bank to act as the calculation agent. The calculation agent, however, cannot
resign or be removed until acceptance of an appointment by a successor as
evidenced by an appropriate agreement entered into between us and the successor
calculation agent. We will inform the holders of the Floating Rate Notes of a
change in the calculation agent through a publication in a daily newspaper with
general circulation in Luxembourg.
S-10
<PAGE> 11
7 1/8% NOTES
The 7 1/8% Notes will bear interest, calculated on the basis of a 360-day year
consisting of twelve 30-day months, from December 9, 1999 at the rate of 7 1/8%
per annum. Interest is payable on June 9 and December 9 of each year, commencing
June 9, 2000, to the person in whose name the 7 1/8% Notes are registered at the
close of business on May 25 and November 25 preceding the respective interest
payment date. However, interest that we pay at maturity will be payable to the
person to whom the principal will be payable.
BOOK-ENTRY, DELIVERY AND FORM
We will offer and sell the Notes in principal amounts of U.S. $1,000 and
integral multiples thereof. We will issue each of the Notes in the form of one
or more fully registered global book-entry notes which we will deposit with, or
on behalf of, The Depository Trust Company and register in the name of Cede &
Co., The Depository Trust Company's nominee. Beneficial interests in the global
notes are represented through book-entry accounts of financial institutions
acting on behalf of beneficial owners as direct or indirect participants in The
Depository Trust Company. Investors may elect to hold interests in the global
notes through The Depository Trust Company, Cedelbank or Morgan Guaranty Trust
Company of New York, Brussels Office, as operator of the Euroclear System, if
they are participants of those systems, or indirectly through organizations
which are participants in those 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 those interests in customers' securities
accounts in the depositaries' names on the books of The Depository Trust
Company. Citibank, N.A. will act as the U.S. depositary for Cedelbank and The
Chase Manhattan Bank will act as the U.S. depositary for Euroclear. Except as
set forth below, holders may transfer the global notes, in whole and not in
part, only to another nominee of The Depository Trust Company or to a successor
of The Depository Trust Company or its nominee.
The Depository Trust Company's management is aware that some computer
applications, systems, and systems for processing data that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." The Depository Trust Company has informed its
participants and other members of the financial community that it has developed
and is implementing a program so that its computer applications and systems, as
the same relate to the timely payment of principal, interest and other
distributions to security holders, book-entry deliveries, and settlement of
trades within The Depository Trust Company, continue to function appropriately.
This program includes a technical assessment and a remediation plan, both of
which are complete. Additionally, The Depository Trust Company's plan included a
testing phase, which was completed in October 1999. The Depository Trust Company
has determined that its internal applications, systems software, hardware and
data service providers' data feeds are Year 2000 ready.
However, The Depository Trust Company's ability to perform its services properly
is also dependent upon other parties, including but not limited to: (1) issuers
and their agents, (2) third-party vendors from whom The Depository Trust Company
licenses software and hardware, and (3) third-party vendors on whom The
Depository Trust Company relies for information or the provision of services,
including telecommunication and electric utility service providers. The
Depository Trust Company has informed its participants and other members of the
financial community that it is contacting third-party vendors from whom The
Depository Trust Company acquires services to: (1) impress upon them the
importance of such services being Year 2000 compliant and (2) determine the
extent of their efforts for Year 2000 remediation and, as appropriate, testing
of their services. In addition, The Depository Trust Company has developed
contingency plans to handle any disruptions relating to the Year 2000 problems.
Cedelbank advises that it is incorporated under the laws of Luxembourg as a
professional depositary. Cedelbank holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Cedelbank's participants through electronic book-entry
changes in accounts of Cedelbank's participants, thereby eliminating the need
for physical movement of certificates. Cedelbank provides to its participants,
among other things, services for safekeeping, administration, clearance and
S-11
<PAGE> 12
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's 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 one of Cedelbank's
participants, 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.
Euroclear advises that it was created in 1968 to hold securities for its
participants and to clear and settle transactions between Euroclear's
participants through simultaneous electronic book-entry delivery against
payment. This eliminates 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. The Brussels, Belgium
office of Morgan Guaranty Trust Company of New York operates Euroclear under
contract with Euroclear Clearance Systems S.C., a Belgian cooperative
corporation. Morgan Guaranty conducts all operations. All Euroclear securities
clearance accounts and Euroclear cash accounts are accounts with Morgan
Guaranty, not Euroclear Clearance Systems S.C. Euroclear Clearance Systems S.C.
establishes policy for Euroclear on behalf of Euroclear's participants.
Euroclear's 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
participant in Euroclear, either directly or indirectly.
Morgan Guaranty Trust Company of New York in Brussels, Belgium is the Belgian
branch of a New York banking corporation which is a member bank of the Federal
Reserve System. As a result, it is subject to the regulation and examination of
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 Morgan Guaranty are
governed by the Terms and Conditions Governing Use of Euroclear, and the related
Operating Procedures of the Euroclear System and applicable Belgian law. These
terms, conditions and procedures 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 fungible without attribution of specific certificates to specific securities
clearance accounts. Morgan Guaranty acts under the above-mentioned terms,
conditions and procedures only on behalf of Euroclear's participants, and has no
record of or relationship with persons holding through Euroclear's participants.
Distributions with respect to the Notes held beneficially through Euroclear will
be credited to the cash accounts of Euroclear's participants in accordance with
the above-mentioned terms, conditions and procedures, to the extent received by
Euroclear's U.S. depositary.
If we issue the Notes in definitive form, we will appoint a paying agent and
transfer agent in Luxembourg. We will inform the holders of the Notes of the
name and address of the appointed paying and transfer agent in Luxembourg
through a publication in a daily leading newspaper with general circulation in
Luxembourg. If we issue the Notes in definitive form, the holders of the Notes
in definitive form will be able to receive payments on, and effect transfers of,
their Notes at the offices of the Luxembourg paying and transfer agent.
We will not issue individual certificates for the Notes in exchange for the
global notes, except in very limited circumstances. If Euroclear, Cedelbank or
The Depository Trust Company notifies us that it is unwilling or unable to
continue as a clearing system in connection with a global note or, in the case
of The Depository Trust Company only, The Depository Trust Company ceases to be
a clearing agency registered
S-12
<PAGE> 13
under the Securities Exchange Act of 1934, and in each case we do not appoint a
successor clearing system within 90 days after receiving such notice from
Euroclear, Cedelbank or The Depository Trust Company or on becoming aware that
The Depository Trust Company is no longer so registered, we 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 the global notes upon delivery of the global notes for cancellation.
Title to book-entry interests in the Notes will pass by book-entry registration
of the transfer within the records of Euroclear, Cedelbank or The Depository
Trust Company, as the case may be, in accordance with their procedures.
Euroclear and Cedelbank may transfer book-entry interests within and between
Euroclear and Cedelbank in accordance with procedures that they establish. The
Depository Trust Company may transfer book-entry interests in the Notes in
accordance with procedures that it establishes. Euroclear, Cedelbank and The
Depository Trust Company may establish procedures to effect transfers of
book-entry interests in the Notes among themselves.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
We will make initial settlement for the Notes in immediately available funds.
Secondary market trading between The Depository Trust Company's participants
will occur in the ordinary way in accordance with The Depository Trust Company's
rules. Settlement will occur in immediately available funds using The Depository
Trust Company's Same-Day Funds Settlement System. Secondary market trading
between Cedelbank's participants and/or Euroclear's participants will occur in
the ordinary way in accordance with the applicable rules and operating
procedures of Cedelbank and Euroclear. The traders will settle the Notes using
the procedures applicable to conventional Eurobonds in immediately available
funds.
Persons holding directly or indirectly through The Depository Trust Company, on
the one hand, and directly or indirectly through Cedelbank's or Euroclear's
participants, on the other, will effect cross-market transfers in The Depository
Trust Company in accordance with The Depository Trust Company rules on behalf of
the relevant European international clearing system by its U.S. depositary.
These cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in the
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 the Notes in The Depository Trust Company, and making
or receiving payment in accordance with normal procedures for same-day funds
settlement applicable to The Depository Trust Company. Cedelbank's participants
and Euroclear's participants may not deliver instructions directly to their
respective U.S. depositaries.
Because of time-zone differences, credits of the Notes received in Cedelbank or
Euroclear as a result of a transaction with a participant of The Depository
Trust Company will be made during subsequent securities settlement processing
and dated the business day following The Depository Trust Company settlement
date. These credits or any transactions in the Notes settled during the
processing will be reported to the relevant participants of Euroclear or
Cedelbank on that business day. Cash received in Cedelbank or Euroclear as a
result of sales of the Notes by or through a participant of Cedelbank or
Euroclear to a participant of The Depository Trust Company will be received with
value on The Depository Trust Company settlement date but will be available in
the relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in The Depository Trust Company.
Although The Depository Trust Company, Cedelbank and Euroclear have agreed to
the foregoing procedures in order to facilitate transfers of the Notes among
their respective participants, they are under no obligation to perform or
continue to perform these procedures. The Depository Trust Company, Cedelbank
and Euroclear may change or discontinue these procedures at any time.
S-13
<PAGE> 14
FURTHER ISSUES
We may from time to time, without notice to or the consent of the registered
holders of the Notes, create and issue additional Notes ranking pari passu with
the Notes of the same series that we originally issued in all respects or in all
respects except for (1) the payment of interest accruing prior to the issue date
of the additional Notes or (2) the first payment of interest following the issue
date of the additional Notes. As a result, we may consolidate the additional
Notes, forming a single series with the Notes of the same series that we
originally issued and having the same terms as to status, redemption or
otherwise as the Notes that we originally issued of the same series.
PAYMENT OF ADDITIONAL AMOUNTS
We will make all payments on the Notes without withholding or deduction for any
taxes, assessments or other governmental charges in effect on the date of
issuance of the Notes or imposed in the future by or on behalf of the United
States or any taxing authority in the United States. In the event any United
States taxes or other charges are imposed on payments on the Notes, we will pay
to the holder of any Note who is a United States alien (as defined below) such
additional amounts as may be necessary so that the net amounts of the principal
and interest on the Notes receivable by a United States alien after withholding
or deduction of any tax, assessment or governmental charge will equal the
amounts of principal and any interest which would have been receivable on a Note
if there were no such withholding or deduction of tax, assessment or
governmental charge. We will not pay any additional amounts, however, with
respect to:
(1) any tax, assessment or other governmental charge which would not
have been so imposed but for (a) the existence of any present or former
connection between the holder (or a fiduciary, settlor, beneficiary, member
or shareholder, or holder of a power over, the holder, if the holder is an
estate, trust, partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, member, shareholder of, or holder of a power) being or having
been a citizen or resident or treated as a resident thereof or being or
having been engaged in a trade or business therein or being or having been
present therein or having or having had a permanent establishment therein,
or (b) the holder's present or former status as a personal holding company
or foreign personal holding company or controlled foreign corporation or
passive foreign investment company for United States federal income tax
purposes or as a corporation which accumulates earnings to avoid United
States federal income tax or as a private foundation or other tax-exempt
organization;
(2) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the holder of the Note for
payment on a date more than 10 days after the date on which the payment
became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(3) any estate, inheritance, gift, sales, transfer, personal property
or excise tax or any similar tax, assessment or governmental charge;
(4) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments in respect of principal of or
any interest on any Note;
(5) any tax, assessment or other governmental charge imposed on
interest received by a holder or beneficial owner of a Note who actually or
constructively owns 10% or more of the total combined voting power of all
classes of our stock entitled to vote or is a bank that acquired a Note in
consideration of an extension of credit made pursuant to a loan agreement
entered into in the ordinary course of business;
(6) any tax, assessment or other governmental charge imposed as a
result of the failure to comply with (a) certification, information,
documentation, reporting or other similar requirements concerning the
nationality, residence, identity or connection with the United States of
the holder or beneficial owner of the Note, if such compliance is required
by statute, or by regulation of the United States Treasury Department, as a
precondition to relief or exemption from such tax, assessment or
S-14
<PAGE> 15
other governmental charge (including backup withholding) or (b) any other
certification, information, documentation, reporting or other similar
requirements under United States income tax laws or regulations that would
establish entitlement to otherwise applicable relief or exemption from such
tax, assessment or other governmental charge;
(7) any tax, assessment or other governmental charge required to be
withheld by any paying agent from any payment of the principal of, or any
interest on any Note, if the payment can be made without such withholding
by at least one other paying agent; or
(8) any combination of items(1), (2), (3), (4), (5), (6) or (7).
Furthermore, we will pay no additional amounts to any holder who is a fiduciary
or partnership or other than the sole beneficial owner of the Note if a settlor
or beneficiary with respect to such fiduciary or a member of such partnership or
a beneficial owner of the Note would not have been entitled to payment of such
additional amounts had such beneficiary, settlor, member or beneficial owner
been the holder of the Notes.
Except as specifically provided under this heading "Payment of Additional
Amounts" and under the heading "Description of Notes-Redemption for Tax
Reasons", we will not be required to make any payment with respect to any tax,
assessment or governmental charge imposed by any government or a political
subdivision or taxing authority thereof or therein.
The term "United States alien" means any person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership, one or more of the members of which is a foreign corporation, a
non-resident alien individual or a non-resident alien fiduciary of a foreign
estate or trust.
REDEMPTION FOR TAX REASONS
We can redeem either series of the Notes before their maturity, in whole but not
in part, if, at any time after the date of issuance of the relevant series of
Notes, as a result of:
- any amendment to, or change in, the laws, including any regulations or
rulings promulgated thereunder, of the United States or any political
subdivision; or
- any change in the application or official interpretation of such laws,
including any proposals for change, amendment or application or
interpretation of such laws;
where the amendment or change becomes effective after the date of this
prospectus supplement, or which proposal is made after such date, or as a result
of any action taken by any taxing authority of the United States which action is
taken or becomes generally known after such date, or any commencement of a
proceeding in a court of competent jurisdiction in the United States after such
date, whether or not such action was taken or such proceeding was brought with
respect to us, we become, or will become, obligated to pay any additional
amounts as provided above under "-- Payments of Additional Amounts" (a "tax
event") in respect of the relevant series of Notes.
Before we can redeem either series of the Notes, we must deliver to the trustee
at least 45 days prior to the date fixed for redemption:
- a written notice stating that the Notes of the relevant series are to be
redeemed, specifying the redemption date and other pertinent information;
and
- an opinion of independent legal counsel to the effect that, as a result
of a tax event, we have or will become obligated to pay any additional
amounts in respect of the relevant series of Notes.
We will give you at least 30 days', but not more than 60 days', notice before
any redemption of your Notes. On the redemption date, we will pay you 100% of
the principal amount of your Note, plus any accrued interest, including any
additional amounts, to the redemption date.
PRESCRIPTION
Any money that we deposit with the trustee or any paying agent for the payment
of principal or any interest on any Note of any series that remains unclaimed
for two years after the date upon which the
S-15
<PAGE> 16
principal and interest are due and payable, will be repaid to us upon our
request unless otherwise required by mandatory provisions of any applicable
unclaimed property law. After that time, unless otherwise required by mandatory
provisions of any unclaimed property law, the holder of a Note will be able to
seek any payment to which that holder may be entitled to collect only from us.
MEETING OF NOTEHOLDERS
The holders of at least 10% in aggregate principal amount of the Notes then
outstanding of any series or all series may request that the trustee call a
meeting of the holders of the Notes of that series or all series, respectively.
The quorum for any meeting of the holders of the Notes is the presence of the
holders of Notes who are entitled to vote a majority in aggregate principal
amount of each relevant series of Notes at the time outstanding.
NOTICES
Notices to holders of the Notes will be published in authorized daily newspapers
in New York City, in London, and, so long as the Notes are listed on the
Luxembourg Stock Exchange, in Luxembourg. It is expected that publication will
be made in New York City in The Wall Street Journal, in London in the Financial
Times, and in Luxembourg in the Luxemburger Wort. Any notice 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 such publication.
U.S. FEDERAL TAXATION
The following is a description of the material United States federal income and
certain estate tax consequences of ownership and disposition of the Notes. This
description provides general information only and is directed solely to original
holders purchasing Notes at the issue price. The issue price is the first price
to the public at which a substantial amount of the Notes are sold, excluding
sales to bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers. This description is
based on the Internal Revenue Code, existing administrative pronouncements and
judicial decisions, existing and proposed Treasury regulations, each as
available and in effect on the date of this prospectus supplement. Changes to
any of the foregoing after the date of this prospectus supplement may affect the
tax consequences described below, possibly with retroactive effect. This
description discusses only Notes held as capital assets. This description does
not discuss all of the tax consequences that may be relevant to a holder in
light of his particular circumstances. This description also does not discuss
all of the tax consequences that may be relevant to holders subject to special
rules, such as (1) certain financial institutions, (2) real estate investment
trusts, (3) regulated investment companies, (4) grantor trusts, (5) insurance
companies, (6) dealers or traders in securities or currencies, (7) persons
holding Notes in connection with a hedging transaction, straddle, conversion
transaction or other integrated transaction or (8) persons who have ceased to be
United States citizens or to be taxed as resident aliens. Persons considering
the purchase of Notes should consult their tax advisors with regard to the
application of the United States federal income and estate tax laws to their
particular situations, as well as any tax consequences arising under the laws of
any state, local or foreign taxing jurisdiction.
UNITED STATES HOLDERS
For purposes of this discussion, a United States holder means a beneficial owner
of a Note that is for United States federal income tax purposes:
- a citizen or resident of the United States;
- a corporation or a partnership created in or organized under the laws of
the United States, any state thereof or the District of Columbia;
- an estate the income of which is subject to United States federal income
taxation regardless of its source;
S-16
<PAGE> 17
- a trust if it has validly elected to be treated as a United States person
for United States federal income tax purposes or if (1) a court within
the United States is able to exercise primary supervision over its
administration and (2) one or more United States persons have the
authority to control all of its substantial decisions; or
- a person otherwise subject to United States federal income taxation on a
net income basis in respect of a Note.
A Non-United States holder is a beneficial owner of a Note that is not a United
States holder.
Payments of Interest
Interest on a Note generally is taxable to a United States holder as ordinary
interest income at the time it is accrued or is received in accordance with the
United States holder's usual method of accounting for tax purposes.
Sale, Exchange or Retirement of the Notes
If you are a United States holder and you sell your Note or it is retired, you
will recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and your adjusted tax basis in the
Note. For these purposes, the amount realized does not include any amount
attributable to accrued interest on the Notes. Amounts attributable to accrued
interest are treated as interest as described under "Payments of Interest"
above. A United States holder's adjusted tax basis in a Note generally will
equal the cost of the Note to the United States holder.
In general, gain or loss realized on the sale, exchange or redemption of a Note
will be capital gain or loss. You should consult your tax advisor regarding the
treatment of capital gains which may be taxed at lower rates than ordinary
income for taxpayers who are individuals, trusts or estates. In addition,
prospective investors should consult their tax advisors regarding the treatment
of capital losses, the deductibility of which is subject to limitations.
NON-UNITED STATES HOLDERS
Interest on Notes
Subject to the discussion under "Backup Withholding and Information Reporting"
below, if you are a Non-United States holder, but are not:
- a controlled foreign corporation related to Textron Financial Corporation
by stock ownership;
- a shareholder owning actually or constructively 10% or more of the total
combined voting power of all classes of stock of Textron Financial
Corporation entitled to vote; or
- a bank which acquired Notes in consideration of an extension of credit
made pursuant to a loan agreement entered into in the ordinary course of
business
and receive an interest payment from Textron Financial Corporation, you will not
be subject to United States federal income or withholding tax provided that: (1)
the interest is not effectively connected with the conduct of a trade or
business within the United States and (2) you provide valid certifications
meeting the requirements of the Internal Revenue Code or otherwise establish an
exemption.
If you are engaged in a trade or business in the United States and interest on
the Note is effectively connected with the conduct of such trade or business,
you will be subject to United States federal income tax on the interest on a net
income basis in the same manner as if you were a United States holder. In
addition, a Non-United States holder that is a foreign corporation may be
subject to a branch profits tax equal to 30%, or lower applicable treaty rate,
of its effectively connected earnings and profits, including any premium and
interest on a Note, for the taxable year, subject to adjustments.
S-17
<PAGE> 18
Sale, Exchange or Retirement
As a Non-United States holder, you will not be subject to United States federal
income tax on gain recognized on a sale, exchange or retirement of a Note unless
(1) such gain is effectively connected with the conduct of a trade or business
within the United States or (2) you are individual that is present in the United
States for 183 or more days in the taxable year of disposition and certain other
requirements are met.
Federal Estate Taxes
If you hold a Note and at the time of your death are not a citizen or resident
of the United States, you will not be subject to United States federal estate
tax as a result of such death, provided that you were not a shareholder owning
actually or constructively 10% or more of the total combined voting power of all
classes of stock of Textron Financial Corporation entitled to vote and, at the
time of your death, payments of interest with respect to your Notes would not
have been effectively connected with your conduct of a trade or business in the
United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
A 31% backup withholding tax and information reporting requirements apply in the
case of certain non-corporate United States persons to certain payments of
principal of, and interest on, an obligation, and of proceeds of the sale of an
obligation before maturity. If you are a United States person that is not a
corporation or other "exempt recipient", backup withholding will apply to you if
you:
- fail to furnish your Taxpayer Identification Number ("TIN") which in the
case of an individual is your Social Security Number,
- furnish an incorrect TIN,
- are notified by the Internal Revenue Service that you have failed to
properly report payments of interest or dividends, or
- under certain circumstances, fail to certify, under penalty of perjury,
that you furnished a correct TIN and have not been notified by the
Internal Revenue Service that you are subject to backup withholding.
Under current Treasury regulations, if you are not a United States person,
backup withholding and information reporting will not apply to payments on Notes
that we or any paying agent make outside the United States, provided that we
have received valid certifications meeting the requirements of the Internal
Revenue Code and neither we nor the paying agent has actual knowledge that you
are a United States person for purposes of such backup withholding tax and
information reporting requirements. In addition, if principal or interest is
paid to the beneficial owner of a Note by a foreign office of a foreign
custodian, foreign nominee or other foreign agent of a beneficial owner, or if a
foreign office of a foreign broker pays the proceeds of the sale of a Note to
the seller of the Note, backup withholding and information reporting will not
apply, provided that the nominee, custodian, agent or broker derives less than
50% of its gross income for certain periods from the conduct of a trade or
business in the United States and is not a controlled foreign corporation.
Principal and interest so paid by a foreign office of other custodians, nominees
or agents, or the payment by a foreign office of other brokers of the proceeds
of the sale of a Note will not be subject to backup withholding, but will be
subject to information of reporting unless (1) the custodian, nominee, agent, or
broker has documentary evidence in its records that the beneficial owner is not
a United States person for purposes of these backup withholding and information
reporting requirements and certain conditions are met, or (2) the beneficial
owner otherwise establishes an exemption. Principal and interest so paid by the
United States office of custodian, nominee or agent, or the payment of the
proceeds of a sale of a Note by the United States office of a broker, is subject
to both backup withholding and information reporting, unless the beneficial
owner certifies its non-United States status under penalties of perjury or
otherwise establishes an exemption.
S-18
<PAGE> 19
Treasury regulations issued on October 6, 1997, and an Internal Revenue Service
notice announcing amendments to these regulations issued on April 29, 1999 (the
"Withholding Regulations"), would modify certain of the rules discussed above
generally with respect to payments on the Notes made after December 31, 2000. In
the case of payments to foreign partnerships, other than payments to foreign
partnerships that qualify as withholding foreign partnerships within the meaning
of the Withholding Regulations and payments to foreign partnerships that are
effectively connected with the conduct of a trade or business in the United
States, the partners of these partnerships will be required to provide the
certification discussed above in order to establish an exemption from backup
withholding tax and information reporting requirements. Moreover, a payor may
rely on a certification provided by a Non-United States holder only if the payor
does not have actual knowledge or a reason to know that any information or
certification stated in the certificate is unreliable. Further, if any payment
of principal, any premium or interest with respect to a Note is made to the
beneficial owner of the Note by the foreign office of a foreign custodian,
foreign nominee or other foreign agent of the beneficial owner, or the foreign
office of a foreign broker pays the proceeds of the sale of a Note to the seller
of the Note, backup withholding and information reporting will not apply,
provided that the nominee, custodian, agent or broker (1) derives less than 50%
of its gross income for certain periods from the conduct of trade of business in
the United States, (2) is not a controlled foreign corporation and (3) is not a
foreign partnership (a) one or more of the partners of which, at any time during
its tax year, is a United States person who, in the aggregate, holds more than
50% of the income or capital interest in the partnership or (b) which, at any
time during its tax year, is engaged in the conduct of trade or business in the
United States. Moreover, payments of principal, any premium, or interest with
respect to Notes made by the foreign offices of the other custodians, nominees
or agents, or the payment by the foreign office of other brokers of the proceeds
of the sale of the Notes, will not be subject to a backup withholding, unless
the payor has actual knowledge that the payee is a United States person, but
will not be subject to information reporting unless (1) the custodian, nominee,
agent or broker had documentary evidence in its records that the beneficial
owner is not a United States person and certain conditions are met, or (2) the
beneficial owner otherwise establishes an exemption.
Prospective investors are strongly urged to consult their own tax advisors with
respect to the withholding tax, backup withholding tax and related matters.
S-19
<PAGE> 20
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement dated
December 2, 1999, we have agreed to sell to each of the underwriters named
below, and each of the underwriters has severally agreed to purchase the
principal amount of the Notes set forth opposite its name below. Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities Inc. are acting
as representatives of the underwriters with respect to the offering of the
Notes. In the underwriting agreement, the several underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all the Notes
offered hereby if any of the Notes are purchased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF FLOATING RATE NOTES OF 7 1/8% NOTES
- ----------- ---------------------- ----------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................. $160,000,000 $240,000,000
J.P. Morgan Securities Inc................................ 160,000,000 240,000,000
Banc of America Securities LLC............................ 20,000,000 30,000,000
Chase Securities Inc. .................................... 20,000,000 30,000,000
Salomon Smith Barney Inc. ................................ 20,000,000 30,000,000
Warburg Dillon Read LLC................................... 20,000,000 30,000,000
------------ ------------
Total........................................... $400,000,000 $600,000,000
============ ============
</TABLE>
The representatives of the underwriters have advised us that they propose
initially to offer the Notes to the public at the offering prices set forth on
the cover page of this prospectus supplement and to certain dealers at such
price less a concession not in excess of .150%, in the case of the Floating Rate
Notes, and .200%, in the case of the 7 1/8% Notes, of the principal amount of
the Notes. The underwriters may allow, and the dealers may reallow, a discount
of .100%, in the case of the Floating Rate Notes, and .125%, in the case of the
7 1/8% Notes, of the principal amount of the Notes to certain other dealers.
After the initial public offering, the public offering prices and concessions to
selected dealers and the allowances to other dealers may be changed.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
The Notes are offered for sale in those jurisdictions in the United States and
Europe where it is legal to make offers. Only offers and sales of the Notes in
the United States, as part of the initial distribution or in connection with
resales of these Notes under circumstances where this prospectus supplement and
the attached prospectus must be delivered, are made pursuant to the registration
statement of which the prospectus, as supplemented by this prospectus
supplement, is a part.
Each underwriter has represented and agreed that it will comply with all
applicable laws and regulations in force in any jurisdiction in which it
purchases, offers, sells or delivers the Notes or possesses or distributes this
prospectus supplement or the attached prospectus. Each underwriter also has
represented that it will obtain any consent, approval or permission required by
it for the purchase, offer or sale by it of the Notes under the laws and
regulations in force in any jurisdiction to which it is subject or in which it
makes purchases, offers or sales. Neither we nor any other underwriter will have
responsibility for obtaining any consent, approval or permission required by an
underwriter as described above.
Each underwriter, severally and not jointly, represents and agrees that:
(1) it has not offered or sold and will not offer or sell any Notes to
persons in the United Kingdom prior to the end 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 purposes 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;
(2) 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
S-20
<PAGE> 21
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
(3) 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 we have applied to list the Notes on the Luxembourg Stock Exchange and
the New York Stock Exchange, the Notes are a new issue of securities with no
established trading market. We cannot give you any assurance as to the liquidity
of, or the trading markets for, the Notes. The underwriters have advised us that
they intend 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.
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 of this prospectus supplement.
In connection with the sale of the Notes, certain of the underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the underwriters may sell Notes in an aggregate principal
amount exceeding that set forth in this prospectus supplement, creating a short
position. In addition, the underwriters may bid for, and purchase, the Notes in
the open market to cover short positions or to stabilize the price of the Notes.
Any of these activities may stabilize or maintain the market price of the Notes
above independent market levels. The underwriters will not be required to engage
in these activities, and may end any of these activities at any time.
In the ordinary course of their respective businesses, certain of the
underwriters or their affiliates have engaged, and will in the future engage, in
commercial banking and investment banking transactions with us and certain of
our affiliates.
GENERAL AND LISTING INFORMATION
We have applied to list the Notes on the Luxembourg Stock Exchange. In
connection with the listing application, we will deposit prior to our listing
our certificate of incorporation, our by-laws and a legal notice relating to the
issuance of the Notes with the Greffier en Chef du Tribunal d'Arrondissement de
et a Luxembourg, where you may obtain copies upon request. So long as any Notes
are outstanding, we will make available for inspection at the main office of
Kredietbank S.A. Luxembourg copies of the above documents, as well as this
prospectus supplement, the attached prospectus, the indenture, our registration
statement on Form 10, as amended, and all future annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K that we file with
the SEC. You also may obtain copies of our registration statement on Form 10, as
amended, as well as our future annual reports, quarterly reports and current
reports free of charge at the office of Kredietbank S.A. Luxembourg.
We have not appointed a Luxembourg paying or transfer agent with respect to the
Notes. We have agreed to appoint an agent in Luxembourg if Notes in definitive
form are issued in the limited circumstances set forth in "Description of
Notes." Kredietbank S.A. Luxembourg will act as intermediary between the
Luxembourg Stock Exchange and us and the holders of the Notes.
We have applied to list the Notes on the New York Stock Exchange. You may review
copies of this prospectus supplement, the attached prospectus and our
registration statement on Form 10, as amended, as well as our future annual
reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form
8-K at the New York Stock Exchange's library. The New York Stock Exchange's
library is located at 20 Broad Street, New York, New York.
Except as we may have disclosed in this prospectus supplement, in the attached
prospectus or in the documents incorporated by reference into the prospectus,
there has been no material adverse change in our financial position since
January 2, 1999.
S-21
<PAGE> 22
We are not a party to any legal or arbitration proceedings, including any that
are pending or threatened, which may have or have had during the previous 12
months a significant effect on our consolidated financial position.
The Floating Rate Notes have been accepted for clearance through Euroclear and
Cedelbank and have been assigned Euroclear and Cedelbank Common Code No.
010525438, International Security Identification Number (ISIN) US883199AE12 and
CUSIP No. 883199AE1. The 7 1/8% Notes have been accepted for clearance through
Euroclear and Cedelbank and have been assigned Euroclear and Cedelbank Common
Code No. 010525454, International Security Identification Number (ISIN)
US883199AF86 and CUSIP No. 883199AF8.
DOCUMENTS INCORPORATED BY REFERENCE
We have filed a registration statement on Form 10 (File No. 0-27559) with the
SEC under the Securities Exchange Act of 1934. We will file annual, quarterly
and special reports, and other information with the SEC. The SEC allows us to
'incorporate by reference" the information we file with the SEC, which means
that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of
this prospectus supplement and the attached prospectus. We incorporate by
reference in this prospectus supplement our registration statement on Form 10,
which includes our financial statements for the past three fiscal years and the
nine month period ended September 30, 1999.
We undertake to provide you, without charge, a copy of any and all of the
documents incorporated by reference in this prospectus supplement and the
attached prospectus, other than exhibits to these documents unless the exhibits
are specifically incorporated by reference into the prospectus supplement or the
attached prospectus. You may request a copy of these documents by writing or
telephoning us at the following address:
Textron Financial Corporation
40 Westminster Street
P.O. Box 6687
Providence, Rhode Island 02940-6687
USA
Attention: Brian F. Lynn
(401) 621-4200
This prospectus supplement and the attached prospectus, together with the
documents incorporated in them by reference, will be available free of charge at
the office of Kredietbank S.A. Luxembourg.
LEGAL OPINIONS
White & Case LLP will pass upon the validity of the Notes for us. Brown & Wood
LLP will pass upon the validity of the Notes for the underwriters.
S-22
<PAGE> 23
PROSPECTUS
[TFC TEXTRON LOGO]
TEXTRON FINANCIAL CORPORATION
40 WESTMINSTER STREET
P.O. BOX 6687
PROVIDENCE, RHODE ISLAND 02940-6687
(401) 621-4200
$3,000,000,000
DEBT SECURITIES
-------------------------
WE WILL PROVIDE SPECIFIED TERMS OF THESE SECURITIES IN SUPPLEMENTS TO THIS
PROSPECTUS.
YOU SHOULD READ THIS PROSPECTUS AND ANY SUPPLEMENT CAREFULLY BEFORE YOU INVEST.
-------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This prospectus is dated December 1, 1999
<PAGE> 24
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
About this Prospectus............... 1
Textron Financial Corporation....... 1
Use of Proceeds..................... 2
Ratio of Earnings to Fixed
Charges............................. 2
Description of Debt Securities...... 2
</TABLE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Plan of Distribution................ 12
Where You Can Find More
Information......................... 13
Legal Opinions...................... 14
Experts............................. 14
</TABLE>
i
<PAGE> 25
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf registration process,
we may sell any combination of the debt securities described in this prospectus
in one or more offerings up to a total maximum offering price of $3,000,000,000.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of the
securities offered. Each prospectus supplement may also add to or update or
change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading WHERE YOU CAN FIND MORE INFORMATION.
TEXTRON FINANCIAL CORPORATION
We were incorporated in the State of Delaware in 1962. Our executive office
is at 40 Westminster Street, Providence, Rhode Island. Our telephone number is
401-621-4200. We are a diversified commercial finance company offering term
loans and leases for equipment, revolving credit arrangements and, other
specialty financial products. Our finance transactions involve many industries,
including aircraft, golf, timeshare resorts, transportation, machine tool, and
automotive service and repair. Our other financial services and products include
transaction syndications, equipment appraisal and management, portfolio
servicing and insurance brokerage. We are a wholly-owned subsidiary of Textron
Inc., a multi-industry company with market-leading operations in aircraft,
automotive, industrial and finance.
We entered into a Support Agreement dated as of May 25, 1994 with Textron
Inc. The Support Agreement requires Textron Inc. to pay us, quarterly, an amount
sufficient to provide that pre-tax earnings, before extraordinary items and
fixed charges, will not be less than 125% of our fixed charges. Fixed charges
for purposes of the Support Agreement include interest on indebtedness and
amortization of debt discount. Textron Inc. was not required to make any
payments under the Support Agreement for the nine months ended September 30,
1999, or for the years ended 1998, 1997, 1996, 1995 and 1994, when our fixed
charge coverage ratios were 170%, 173%, 171%, 165%, 160% and 172%, respectively.
In addition, Textron Inc. has agreed to maintain our consolidated shareholders'
equity at an amount not less than $200 million. Under the terms of the Support
Agreement, we agree with Textron Inc. that one hundred percent (100%) of our
issued and outstanding common stock will be owned by Textron Inc. or a
corporation controlled by, controlling, or under common control with, Textron
Inc. The Support Agreement is not a guarantee by Textron Inc. of the payment of
interest or principal of any obligation, indebtedness or liability by us,
including the debt securities offered hereby, to any person. However, the
Support Agreement does contain provisions protecting our investors from the
termination of the Support Agreement and entitling them to enforce its
provisions against Textron Inc. As a result, if Textron Inc. does not comply
with its obligations under the Support Agreement, holders of our debt securities
and other creditors could bring an action against Textron Inc. to compel Textron
Inc. to comply with its obligations.
<PAGE> 26
USE OF PROCEEDS
We will use the net proceeds from the sale of the debt securities that we
offer for sale by this prospectus for the purpose that we specify in the
prospectus supplement for those debt securities. Those purposes may include
repayment of debt, origination of loan and lease financings, acquisition of
finance portfolios and businesses and other general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30, 1999 1998 1997 1996 1995 1994
- ------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.69 1.72 1.70 1.65 1.60 1.72
</TABLE>
For these ratios, we calculated earnings by adding the following:
- pre-tax income from continuing operations before adjustment for minority
interests in consolidated subsidiaries or income or loss from investments
that we account for using the equity method of accounting;
- fixed charges;
- amortization of previously capitalized interest;
- distributed income of investments that we account for using the equity
method of accounting; and
- our share of pre-tax losses of investments that we account for using the
equity method of accounting and then subtracting:
-- capitalized interest and
-- minority interests in pre-tax income of subsidiaries that have not
incurred fixed charges.
For this purpose, we calculated fixed charges by adding the following:
- interest expensed and capitalized;
- amortized premiums, discounts and capitalized expenses relating to
indebtedness;
- an estimate of interest included in rental expense; and
- preferred stock dividend requirements, if any, of consolidated
subsidiaries.
DESCRIPTION OF DEBT SECURITIES
We will issue the debt securities under an indenture between us and
SunTrust Bank, Atlanta, as trustee.
We have summarized below provisions of the indenture and the Trust
Indenture Act of 1939. The summary does not contain all of the provisions that
you may want to consider as an investor in the debt securities. You may wish to
review the indenture. We have filed a copy of the indenture with the SEC.
2
<PAGE> 27
GENERAL
The indenture does not limit the amount of debt securities that we may
issue under it. In addition, the indenture does not limit the amount of any
other debt that we may issue under other financing documents.
We are allowed under the indenture to issue debt securities in one or more
series. We will include in the prospectus supplement for a series of debt
securities being offered specific terms of the debt securities. These terms will
include some or all of the following:
- the title of the debt securities;
- the total principal amount and the permitted denominations of the debt
securities;
- the currency or currencies in which the principal of and any interest on
the debt securities will be payable;
- the date on which the debt securities will be payable;
- the interest rate, if any, for the debt securities or the method that
will be used to determine the interest rate;
- the places where principal and any interest will be payable;
- any mandatory or optional repayment or redemption provisions; and
- any other terms of the debt securities.
We are allowed under the indenture to issue debt securities of a single
series at various times, with different maturity dates and redemption and
repayment provisions, if any, and different interest rates. We will specify in
the prospectus supplement the persons to whom and the manner in which any
interest will be payable.
The debt securities will be unsecured, unsubordinated indebtedness of our
company. The debt securities will rank equally with all of our other unsecured
and unsubordinated indebtedness.
We will issue the debt securities in the denominations that we set forth in
the applicable prospectus supplement. The trustee will register the debt
securities in the names of the holders of the debt securities. We will maintain
an office or agency where holders of the debt securities may present the debt
securities for payment, transfer or exchange. We will not charge any service
charge for any transfer or exchange of the debt securities, but we may require a
payment sufficient to cover any tax or other governmental charge payable on the
debt securities.
We may sell some of the debt securities at a substantial discount below
their stated principal amount and we may provide for the payment of no interest
or interest at a rate which at the time of issuance is below market rates. We
will describe the U.S. federal income tax consequences and other special
considerations applicable to any discounted debt securities in the prospectus
supplement relating to the discounted debt securities.
BOOK-ENTRY PROCEDURES
We may issue the debt securities in the form of one or more book-entry
certificates registered in the name of a depositary or a nominee of a
depositary. Unless we otherwise state in the applicable prospectus supplement,
the depositary will be The Depository Trust Company. The Depository Trust
Company has informed us that its nominee will be
3
<PAGE> 28
Cede & Co., who will be the initial registered holder of any series of debt
securities that are issued in book-entry form.
If we use the book-entry only form, we will not issue certificates to
individual holders of the debt securities, except as set forth below or in the
applicable prospectus supplement. The Depository Trust Company and its
participating organizations will only show beneficial interests in book-entry
securities on and transfers of book-entry securities through the records that it
and its participating organizations maintain. In addition, if holders of debt
securities issued in book-entry form want to take any action, they must instruct
the participating organization through which they hold the debt securities. The
participating organization then must instruct The Depository Trust Company or
Cede & Co., as the registered holder of the debt securities, to take action.
The Depository Trust Company has provided us with the following
information. The Depository Trust Company 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 United States Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under Section 17A of
the Securities Exchange Act of 1934. The Depository Trust Company holds
securities that its participating organizations, or direct participants, deposit
with it. The Depository Trust Company also facilitates the clearance and
settlement of securities transactions among direct participants through
electronic book-entries. This eliminates the need for physical exchange of
certificates. Direct participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. Other
organizations, including banks, brokers, dealers and trust companies that work
with a direct participant also use The Depository Trust Company's book-entry
system. The rules that apply to The Depository Trust Company and its
participants are on file with the SEC.
If anyone wishes to purchase, sell or otherwise transfer debt securities
issued in book-entry form, they must do it through a direct or indirect
participant. Holders will not be recognized as registered holders of the debt
securities and, thus, will be permitted to exercise their rights only indirectly
through and subject to the procedures of participants and, if applicable,
indirect participants.
The absence of physical certificates may limit the ability of a holder to
pledge debt securities issued in book-entry form to persons or entities that do
not participate in The Depository Trust Company system, or to otherwise act with
respect to the debt securities.
The Depository Trust Company has advised us that it will only take an
action that the indenture permits a registered holder of any debt securities to
take if a participant directs it to do so.
Debt securities represented by a book-entry security will be exchangeable
for debt securities in definitive form with the same terms only if:
- The Depository Trust Company notifies us that it is unwilling or unable
to continue as depositary or The Depository Trust Company ceases to be a
clearing agency registered under applicable law and we do not appoint a
new depositary within 90 days;
- we determine that the book-entry security is now exchangeable for debt
securities in definitive form; or
4
<PAGE> 29
- an event of default has occurred and is continuing with respect to the
debt securities.
If any of these events occur, The Depository Trust Company will generally notify
all direct participants of the availability of definitive debt securities.
Except as we describe in this section, a book-entry security may not be
transferred except as a whole by The Depository Trust Company to its nominee or
by its nominee to The Depository Trust Company or another of its nominees or to
a successor depositary appointed by us.
CERTAIN COVENANTS
We must comply with the covenants which are contained in the indenture
described below. However, the covenants may not ensure that the holders of debt
securities will receive payments of principal and interest on the debt
securities when due in the event of a highly leveraged or similar transaction
involving our company. These types of transactions would include a leveraged
buyout or a change of control of our company. Also, the covenants will not limit
the amount of debt we may incur or the amount of dividends we may pay to our
shareholder.
LIMITATIONS ON LIENS
We will not directly or indirectly, and will not allow any Subsidiary to,
create, assume or incur any Lien on any of the properties and assets of our
company or any Subsidiary unless we grant to the holders of the outstanding debt
securities a Lien on the same property or assets that is equal in seniority to
the Lien. However, we will not be required to grant a Lien as security to the
holders of the outstanding debt securities if our company or any Subsidiary
merely:
- leases property to others in the ordinary course of business, or leases
or subleases property that is not necessary in the operation of its
business;
- creates, assumes or incurs any Lien if (1) the Lien secures indebtedness
for borrowed money which was used to finance the acquisition of the
property that is subject to the Lien and (2) the Lien is created at the
same time as our company or the Subsidiary acquired the property or
within 90 days after the acquisition;
- assumes:
-- any Lien existing on any asset of any Person at the time the Person
becomes a Subsidiary that is not created in contemplation of the
event;
-- any Lien on any asset of any Person existing at the time the Person
merges or consolidates with or into our company or a Subsidiary that
is not created in contemplation of the merger or consolidation; and
-- any Lien existing on any asset prior to the time our company or a
Subsidiary acquires the asset if the Lien is not created in
contemplation of the acquisition;
5
<PAGE> 30
- makes any deposit with or gives any form of security to any governmental
agency or similar body in order to enable our company or any Subsidiary
to:
-- maintain self-insurance;
-- participate in any fund in connection with workmen's compensation,
unemployment insurance, old-age pensions, or other social security;
-- share in any privileges or other benefits available to corporations
participating in any arrangement described above; or
-- for any other purpose at any time required by law or regulation in
order to transact business or exercise any privilege or license;
- deposits assets of our company or any Subsidiary with any surety company
or clerk of any court, or in escrow, as collateral in connection with any
bond on appeal by our company or any Subsidiary from any judgment or
decree against it, or in connection with any other judicial proceedings
by or against our company or any Subsidiary;
- incurs upon any of its property or assets:
-- Liens for taxes or other governmental charges which are not yet due
or are payable without penalty or which our company or any Subsidiary
is contesting in good faith and for which our company or the
Subsidiary has set aside adequate reserves on our company's or the
Subsidiary's books, as long as foreclosure or similar proceedings
have not been started;
-- the Liens of any judgment, if the judgment has not remained
undischarged, or unstayed on appeal or otherwise, for more than six
months;
-- undetermined Liens or charges incident to construction;
-- materialmen's, mechanics', workmen's, repairmen's or other similar
Liens arising in the ordinary course of business in respect of
obligations which are not yet due or which our company or such
Subsidiary is contesting in good faith, or deposits to obtain the
release of these Liens; or
-- any encumbrances consisting of zoning restrictions, licenses,
easements and restrictions on the use of real property and minor
defects and irregularities in the title, which do not materially
impair our company's or the Subsidiary's use of the property or
decrease the value of the property for the purpose of our or any
Subsidiary's business;
- creates other Liens arising in the ordinary course of its business which:
-- do not secure Debt;
-- do not secure any obligation in an amount exceeding $5,000,000; and
-- do not in the aggregate materially detract from the value of its
property or assets or materially impair the use in the operation of
its business;
- creates Liens not otherwise permitted securing Debt in an aggregate
principal amount at any time outstanding not to exceed 15% of
Consolidated Net Tangible Assets;
6
<PAGE> 31
- creates in favor of any lender or holder of commercial paper of our
company or any of our Subsidiaries in the ordinary course of business a
banker's lien or right to offset amounts deposited with the lender or
holder of commercial paper;
- creates or assumes Liens securing debt that a Subsidiary owes to our
company or another Subsidiary;
- creates, assumes or incurs any Lien upon any of its properties or assets
in connection with the sale, transfer or other disposition of the
properties or assets:
-- in connection with the securitization or other asset-based financing;
-- to a real estate investment trust or similar entity; or
-- in connection with any transaction similar to the transactions
referred to in the immediately preceding clauses;
provided, however, that any sale, transfer or disposition must be for
valid consideration and must not benefit directly or indirectly any
holder of any outstanding obligation or indebtedness of our company more
than any other holder if that outstanding obligation or indebtedness did
not previously benefit from a Lien; and
- causes or allows any extension, renewal or replacement of any Lien
referred to above, as long as:
-- we or any Subsidiary do not increase the principal amount of the
obligations and indebtedness secured by the Lien, except that:
- the amount of obligations or indebtedness secured by extensions,
renewals or replacements of Liens on property acquired as a
result of defaults on receivables may exceed the principal amount
prior to the extension, renewal or replacement; and
- the amount of obligations secured by extensions, renewals or
replacements of Liens on property may exceed the amount of the
obligations prior to the extension, renewal or replacement if the
value of the property has increased and the loan to value ratio
of the refinanced obligations does not exceed the loan to value
ratio of the obligations relating to the original Lien; and
-- the extension, renewal or replacement of any Lien is limited to that
portion of the property which secured the Lien that is extended,
renewed or replaced plus improvements on the property.
CERTAIN DEFINITIONS
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any particular time, the
aggregate amount of assets after deducting (a) all current liabilities,
excluding any liability that by its terms is extendable or renewable at the
option of the obligor to a time more than 12 months after the time the amount
thereof is computed, and (b) all goodwill, excess of cost over assets acquired,
patents, copyrights, trademarks, tradenames and other like intangibles, all as
shown in our company's and our subsidiaries' most recent consolidated financial
statements prepared in accordance with generally accepted accounting principles.
"DEBT" of any Person means at any date, without duplication:
- all obligations of the Person for borrowed money;
- all obligations of the Person evidenced by bonds, debentures, notes or
other similar instruments;
7
<PAGE> 32
- all obligations of the Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the
ordinary course of business;
- all obligations of the Person as lessee which the Person capitalizes in
accordance with generally accepted accounting principles;
- all Debt of others secured by a Lien on any asset of the Person, whether
or not the Debt is assumed by the Person; and
- all Debt of others that the Person guarantees.
However, "Debt" of our company or a Subsidiary will not include
Non-recourse Debt.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, hypothecation or encumbrance of any kind on the
asset. However, "Lien" does not mean security interests under Article 9 of the
Uniform Commercial Code, or any successor provision, on sales of accounts or
chattel paper. For the purposes of the debt securities, our company or any
Subsidiary will be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to the asset.
"NON-RECOURSE DEBT" of our company or a Subsidiary means any obligations
for borrowed money of our company or a Subsidiary that (1) are secured by
specific assets, (2) are not reflected in the balance sheet of our company or a
Subsidiary in accordance with generally accepted accounting principles and (3)
are issued under instruments which limit the recourse against the obligor to the
specific assets. In the case of all Non-recourse Debt incurred after the date of
the indenture, if under applicable law, a holder of the obligation could ever
become entitled to recourse against the obligor under applicable bankruptcy law,
the instrument must also contain a provision that:
- the holder's recourse claim in respect of the obligation will be
subordinate and junior to all Debt evidenced by the debt securities of
any series; and
- the holder of the obligation cannot receive any payment in respect of any
obligation, other than the proceeds of the specific assets that secures
the obligation, until we have paid all debt securities of any series in
full or have provided funds for their payment.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"SUBSIDIARY" means at any date any entity in which we directly or
indirectly own or control securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions.
MERGER AND CONSOLIDATION
We may consolidate or merge with or into any other Person and may transfer
or lease all or substantially all of our property to any Person only if:
- the Person formed by or resulting from the consolidation or merger, or
which will receive the property enters into a supplemental indenture in
which it
-- assumes the due and punctual payment of the principal, premium, and
interest on the debt securities; and
8
<PAGE> 33
-- agrees to perform and observe each agreement or covenant under the
debt securities and the indenture; and
- immediately after giving effect to the consolidation, merger, transfer or
lease of property discussed above, no Event of Default and no event
which, after notice or lapse of time or both, would become an Event of
Default will have occurred and is continuing.
Any transfer described above, but not a lease, will concurrently release us from
further obligations under the debt securities and the indenture.
EVENTS OF DEFAULT, WAIVER AND NOTICE
The following will be "Events of Default" for any series of debt
securities:
- our failure to pay any interest or any additional amounts on any series
of debt securities when due and which remains unpaid for a period of 30
days;
- our failure to pay the principal or any premium on any series of debt
securities when due;
- our failure to perform, or our breaching, any covenant or warranty of our
company contained in any series of debt securities or the indenture which
remains unremedied 90 days after the holders of at least 25% in aggregate
principal amount of any series of debt securities then outstanding
provide written notice of our failure to us;
- if any event of default under any mortgage, indenture or instrument
occurs and results in debt in excess of $50,000,000 of our company
becoming or being declared due prior to the date on which it would
otherwise become due, and the acceleration is not annulled, or the debt
is not discharged, within 30 days after the holders of at least 25% in
aggregate principal amount of any series of debt securities then
outstanding provide to us written notice of the event of default;
- the Support Agreement ceases to be in full force and effect for any
reason or is amended or modified in any manner unless
-- prior to its termination or amendment, Standard & Poor's Corporation,
Moody's Investor Service and any other nationally recognized
statistical rating organization then rating securities of our company,
confirm they will not downgrade or place on what is commonly referred
to as a "watch list" for possible downgrading any of our securities as
a result of the termination or amendment of the Support Agreement; or
-- if the termination or amendment is as a result of another Person's
assumption of the debt securities under the provisions described in
"Merger and Consolidation" above, the senior debt securities of the
Person assuming the debt securities are rated by Standard & Poor's
Corporation or Moody's Investor Service immediately following the
assumption at a rating equal to or greater than the rating assigned to
securities of our company by each rating agency;
- Textron Inc., our company or any "significant subsidiary," as defined in
Section 1.02(w) of Regulation S-X of the Securities Act, or any successor
provision thereto, of our company:
-- commences or consents to a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or
its debts
9
<PAGE> 34
under any bankruptcy or similar law or seeking the appointment of a
trustee or other similar official of it or any substantial part of
its property;
-- makes a general assignment for the benefit of creditors;
-- fails generally or admits its inability to pay its debts as they
become due; or
-- takes any corporate action to authorize any of the foregoing;
- an involuntary case or other proceeding (1) is commenced against Textron
Inc., our company or any significant subsidiary of our company seeking
liquidation or other relief with respect to its or our debts under any
bankruptcy or other similar law or seeking the appointment of a trustee
or other similar official and (2) is not dismissed or stayed within 60
days; or
- an order for relief is entered against Textron Inc., our company or any
significant subsidiary of our company under the Federal bankruptcy laws.
In case an Event of Default other than one described in the last two
bullet-points above occurs and is continuing with respect to a particular series
of debt securities, then the holders of at least 25% in aggregate principal
amount of that particular series of debt securities then outstanding may declare
the principal of all outstanding debt securities of that particular series to be
immediately due and payable. If an Event of Default described in the last two
bullet-points occurs and is continuing with respect to a particular series of
debt securities, the principal of all outstanding debt securities of that
particular series will automatically become due and payable. Upon any
acceleration, any premium and interest on the debt securities so accelerated
will also become immediately due and payable. At any time after an acceleration
but before the holders of debt securities obtain a judgment or decree for
payment of money due, the holders of a majority in aggregate principal amount of
outstanding debt securities may rescind and annul the acceleration and its
consequences, provided all required payments, other than as a result of the
acceleration, shall have been made and all Events of Default are cured or
waived.
The holders of a majority in aggregate principal amount of any series of
outstanding debt securities may waive, on behalf of all of the holders of that
series, any Event of Default and its consequences or past defaults, except a
default in the payment of the principal of, or premium, if any, or interest, if
any, on, debt securities of that particular series or a default under a covenant
or agreement that cannot be modified without the consent of the holder of each
debt security that is affected.
If a default or an Event of Default occurs and continues for any series of
debt securities, the holders of at least a majority in aggregate principal
amount then outstanding for any series of debt securities may direct the time,
method and place of conducting any proceeding or remedy available to the
trustee, or exercising any power given to the trustee under the indenture for
that series of debt securities.
The trustee does not have to exercise any of its rights or powers under the
indenture at the direction of any holders of debt securities unless the holders
offer the trustee reasonable security or indemnity against expenses and
liabilities.
We must file with the trustee annually a written statement regarding the
presence or absence of certain defaults.
10
<PAGE> 35
DEFEASANCE
DEFEASANCE AND DISCHARGE
The indenture provides that we will be discharged from all
non-administrative obligations in respect of the debt securities of any series
if we deposit with the trustee, in trust, money and/or U.S. government
obligations which will provide enough money to pay the principal and interest on
the debt securities of the series on the stated due dates of these payments in
accordance with the terms of the indenture and the debt securities of that
series.
We may establish this trust only if, among other things, we deliver to the
trustee an opinion of counsel stating that the holders of the debt securities of
the series will not recognize income, gain or loss for federal income tax
purposes as a result of the defeasance and will be subject to federal income tax
on the same amount and in the same manner and at the same times as would have
been the case if the defeasance had not occurred.
DEFEASANCE OF LIMITATIONS ON LIENS COVENANT AND RELATED EVENTS OF DEFAULT
The indenture provides that we may be released from our obligation to
comply with the restrictive covenant regarding limitations on Liens and we would
no longer trigger Events of Default under the indenture and the debt securities
of a series with respect to this covenant, if we deposit with the trustee, in
trust, money and/or U.S. government obligations which, through the payment of
interest and principal thereon, will provide enough money to pay the principal
and interest on the debt securities of that series on the stated due dates of
these payments in accordance with the terms of the indenture and the debt
securities of that series. Our other obligations under the indenture and the
debt securities of that series and other Events of Default would remain in full
force and effect.
We may establish this trust only if, among other things, we deliver to the
trustee an opinion of counsel stating that the holders of the debt securities of
the series will not recognize income, gain or loss for federal income tax
purposes as a result of the defeasance of the covenant and Events of Default
described above and will be subject to federal income tax on the same amounts
and in the same manner and at the same times as would have been the case if the
defeasance had not occurred.
If we exercise the option described in this section and the debt securities
of the series are declared due and payable because of the occurrence of any
Event of Default, other than the Event of Default described above in the third
bullet point under "Events of Default", the amount of money and U.S. government
obligations on deposit with the trustee will be sufficient to pay amounts due on
the debt securities of that series at the time of their stated maturity but may
not be sufficient to pay amounts due on the debt securities of that series at
the time of the acceleration resulting from the Event of Default.
CHANGES TO THE INDENTURE
Under the indenture, we may modify our rights and obligations and the
rights of the holders of debt securities with the consent of the holders of at
least a majority of the principal amount of the outstanding debt securities of
all series issued under the indenture affected by the modification. However, we
are required to get the consent of the holder of each debt security affected to
make the following modifications of the debt securities:
- an extension of the fixed maturity of any debt security;
- a reduction of the principal amount payable on any debt security;
11
<PAGE> 36
- a reduction in the rate of interest, or change in the calculation of
interest, payable on any debt security;
- change any obligation to pay any additional amounts or reduce any
additional amounts payable on any debt security;
- a change in currency in which payments are made;
- an extension of the time of payment of interest;
- a modification that affects adversely any right of a holder of a debt
security to repayment;
- a reduction in the principal amount of an original issue discount debt
security due and payable upon acceleration of the maturity;
- a reduction in the portion of the principal amount of a debt security
payable in bankruptcy;
- a reduction in amounts payable upon redemption;
- a reduction in the rate of interest payable on overdue amounts;
- a modification that impairs the right of any holder of any debt security
to institute suit for the enforcement of any required payment on the debt
security on or after the fixed maturity of the debt security; and
- a reduction in the percentage of holders of the outstanding debt
securities of each series required to consent to any modification
discussed above.
Under the indenture, we can make modifications to the indenture with the
consent of the trustee but without the consent of any holders of debt securities
to evidence our merger or the replacement of the trustee and for other purposes
set forth in the indenture.
CONCERNING THE TRUSTEE
We enter into a variety of banking transactions with the trustee in the
ordinary course of our business.
GOVERNING LAW
The debt securities and the indenture will be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflict
of law principles.
PLAN OF DISTRIBUTION
We may sell the debt securities described in this prospectus:
- to or through underwriters or dealers;
- directly to one or more purchasers; or
- through agents.
BY UNDERWRITERS
If we use underwriters in the sale, the underwriters will acquire debt
securities for their own account. The underwriters may resell the debt
securities in one or more
12
<PAGE> 37
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The obligations of
the underwriters to purchase the securities will be subject to certain
conditions. The underwriters may from time to time modify any initial public
offering price and any discounts or concessions allowed or re-allowed or paid to
dealers.
DIRECT SALES
We may directly sell debt securities of any series. In this case, no
underwriters or agents would be involved.
BY AGENTS
We may sell debt securities of any series through agents that we designate.
The agents will agree to use their reasonable best efforts to solicit purchases
for the period of their appointment.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution of
the debt securities may be underwriters, as defined in the Securities Act of
1933, and any discounts, concessions or commissions that we pay them and any
profit on their resale of the debt securities offered by this prospectus may be
treated as underwriting discounts, concessions and commissions under the
Securities Act. We will identify any underwriters or agents and describe their
compensation in a prospectus supplement.
We may have agreements with the underwriters, dealers and agents who
participate in the sale of debt securities to indemnify them against certain
civil liabilities, including liabilities under the Securities Act, or to
contribute with respect to payments which the underwriters, dealers or agents
may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
The debt securities of a series, when first issued, will have no
established trading market. Any underwriters or agents to or through whom we
sell debt securities of a series for public offering and sale may make a market
in the debt securities, but will not be obligated to do so and could stop doing
so at any time without notice. We cannot assure you that a market for any series
of debt securities we issue will exist.
If we indicate in a prospectus supplement, we will authorize underwriters
or our agents to solicit offers by certain institutional investors to purchase
debt securities from us which will be paid for and delivered on a future date
specified in the prospectus supplement. The obligations of any purchasers under
these delayed delivery and payment arrangements will not be subject to any
conditions except that the purchase at delivery must not be prohibited under the
laws of any jurisdiction in the United States to which the institutional
investor is subject.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3 (File No. 333-88509)
with the SEC under the Securities Act of 1933, covering the debt securities to
be offered from time to time by this prospectus. This prospectus does not
contain all of the information included in the registration statement.
13
<PAGE> 38
We also have filed a registration statement on Form 10 (File No.
0-27559)with the SEC under the Securities Exchange Act of 1934. We will file
annual, quarterly and special reports, and other information with the SEC. Our
parent company, Textron Inc., also files annual, quarterly and special reports,
and other information with the SEC. Textron Inc.'s and our SEC filings are
available to the public over the Internet from the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file, or Textron
Inc. files, 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
further information on the public reference rooms and their copy charges.
The SEC allows us to "incorporate by reference" in this prospectus the
information in documents we file with it. This means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information in documents that we file later with the SEC will
automatically update and supersede information contained in documents filed
earlier with the SEC or contained in this prospectus. We incorporate by
reference in this prospectus the Form 10 and any future filings that we may make
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until we, or our agents, sell all of the securities that
may be offered by this prospectus.
You may request a copy of these documents at no cost to you by writing or
telephoning us at the following address:
Textron Financial Corporation
40 Westminster Street
P.O. Box 6687
Providence, Rhode Island 02940-6687
Attention: Brian F. Lynn
(401) 621-4200
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of the securities described in this prospectus in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
LEGAL OPINIONS
White & Case LLP will issue for us an opinion about the legality of the
debt securities.
Any underwriters will be advised about the validity of the debt securities
by their own legal counsel.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements for the year ended January 2, 1999 as set forth in their
report included in our registration statement on Form 10, and which is
incorporated by reference in this prospectus. Our consolidated financial
statements are incorporated by reference in reliance on their reports, given on
their authority as experts in accounting and auditing.
14
<PAGE> 39
(This page intentionally left blank.)
<PAGE> 40
REGISTERED OFFICES OF THE COMPANY
40 Westminster Street
P.O. Box 6687
Providence, Rhode Island 02940-6687
United States
LEGAL AND TAX ADVISORS
TO TEXTRON FINANCIAL CORPORATION
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036-2787
United States
AUDITORS
Independent Auditors
of Textron Financial Corporation
ERNST & YOUNG LLP
200 Clarendon Street
Boston, MA 02116
United States
LEGAL ADVISORS TO THE UNDERWRITERS
BROWN & WOOD LLP
One World Trade Center
New York, New York 10048-0557
United States
LISTING AGENT
KREDIETBANK S.A. LUXEMBOURG
43, Boulevard Royal
L-2955
Luxembourg
TRUSTEE
SUNTRUST BANK, ATLANTA
Corporate Trust Division
25 Park Place, 24th Floor
Atlanta, Georgia 30303-2900
United States
