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Filed Pursuant to Rule 424(b)(2)
Registration No. 33-62649
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 14, 1996)
$100,000,000
[LOGO OF INTERNATIONAL LEASE FINANCE CORPORATION]
INTERNATIONAL LEASE FINANCE CORPORATION
FLOATING RATE NOTES DUE NOVEMBER 2, 1998
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Interest on the Floating Rate Notes due November 2, 1998 (the "Notes") will
be payable on each February 2, May 2, August 2, and November 2 (each an
"Interest Payment Date"), commencing February 2, 1997, and at maturity. If any
Interest Payment Date would otherwise be a day that is not a Business Day (as
defined herein), payment of interest on such Interest Payment Date will be
postponed to the next day that is a Business Day. The rate of interest on the
Notes will be reset daily (the "Interest Reset Date"). The interest rate in
effect on each Interest Reset Date will be the Federal Funds Rate (as defined
herein) plus .21% on the Business Day preceding such Interest Reset Date (such
day referred to herein as the "Interest Determination Date"); provided however,
that the interest rate on the Notes on October 23, 1996 will be determined on
October 22, 1996. See "Description of the Notes--Interest." The Notes will not
be redeemable prior to maturity. The Notes will be unsecured obligations of the
Company.
The Notes offered hereby will be issued in the form of a single Global
Security registered in the name of Cede & Co., as nominee of The Depository
Trust Company, which will act as the Depositary for the Notes. Interests in the
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary (with respect to participants' interests)
and its participants. Except as described herein, owners of beneficial
interests in the Notes will not be entitled to receive physical delivery of
Notes in definitive form. See "Description of the Notes".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Underwriter has agreed to purchase the Notes from the Company at 100% of
their principal amount ($100,000,000 aggregate proceeds to the Company, before
deducting expenses payable by the Company estimated at $100,000), subject to
the terms and conditions set forth in the Underwriting Agreement.
The Underwriter proposes to offer the Notes from time to time for sale in one
or more negotiated transactions, or otherwise, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. For further information with respect to the plan of
distribution and any discounts, commissions, or profits on resale that may be
deemed underwriting discounts or commissions, see "Underwriting" herein.
------------------
The Notes offered by this Prospectus Supplement are offered by the
Underwriter subject to prior sale, withdrawal, cancellation or modification of
the offer without notice, to delivery to and acceptance by the Underwriter and
to certain further conditions. It is expected that delivery of the Notes will
be made through the facilities of The Depository Trust Company, on or about
October 23, 1996, against payment therefor in immediately available funds.
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LEHMAN BROTHERS
OCTOBER 18, 1996
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby are estimated to
be $99,900,000. The Company intends to use the net proceeds to repay maturing
commercial paper. At October 18, 1996, the Company had approximately $2.8
billion of commercial paper outstanding with a weighted average interest rate
of approximately 5.45%.
DESCRIPTION OF THE NOTES
GENERAL
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of Debt Securities" in the accompanying
Prospectus, to which description reference is hereby made. The Notes offered
hereby are to be issued under an Indenture, dated as of November 1, 1991 (the
"Indenture"), between the Company and First Trust of Illinois, National
Association (successor to Continental Bank, National Association), as Trustee
(the "Trustee").
The Notes will be limited to $100,000,000 in aggregate principal amount and
will mature on November 2, 1998. If the maturity date of the Notes falls on a
day that is not a Business Day, the payment of principal and interest will be
made on the next succeeding Business Day, and no interest on such payment
shall accrue for the period from and after the maturity date.
The interest rate on the Notes will be reset daily as described herein based
on the Federal Funds Rate, plus .21%. Interest on the Notes is payable
quarterly in arrears on each February 2, May 2, August 2 and November 2,
commencing February 2, 1997. If any Interest Payment Date would fall on a day
that is not a Business Day, such Interest Payment Date will be postponed to
the next day that is a Business Day. Interest on the Notes will be paid to the
persons in whose names the Notes are registered at the close of business on
the date 15 days next preceding any Interest Payment Date (whether or not a
Business Day); provided, however, that interest payable on November 2, 1998
will be payable to the persons to whom the principal of such Notes shall be
payable. The Notes will not be redeemable prior to maturity and will not be
subject to any sinking fund.
"Business Day" means any day that is not a Saturday or Sunday, and that, in
The City of New York, is not a day on which banking institutions are generally
authorized or obligated by law to close.
The "Interest Determination Date" pertaining to an Interest Reset Date will
be the Business Day preceding such Interest Reset Date.
"Interest Period" means the period from and including October 23, 1996 to
but excluding the first Interest Payment Date and each successive period from
and including an Interest Payment Date to but excluding the next Interest
Payment Date.
First Trust of Illinois, National Association shall be the "Calculation
Agent" with respect to the Notes. The Calculation Agent will notify the
Company and the Trustee of each determination of the interest rate applicable
to the Notes promptly after such determination is made. The Trustee will, upon
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the request of the holder of any Note, provide the interest rate then in
effect and, if different, the interest rate which will become effective as a
result of a determination made with respect to the most recent Interest
Determination Date with respect to such Note. The Trustee will not be
responsible for determining the interest rate applicable to any Note.
INTEREST
The rate of interest on the Notes will be reset daily (an "Interest Reset
Date"). The interest rate in effect on each Interest Reset Date will be the
Federal Funds Rate plus .21% on the related Interest Determination Date.
Interest payments for the Notes shall be the amount of interest accrued from
the date of issue or from the last date to which interest has been paid to,
but excluding, the Interest Payment Date or maturity date, as the case may be.
Accrued interest on the Notes shall be calculated by multiplying the
principal amount of the Notes by an accrued interest factor. Such accrued
interest factor will be computed by adding the interest factors calculated for
each day in the Interest Period for which interest is being paid. The interest
factor for each such day is computed by dividing the interest rate applicable
to such day by 360. All percentages used in or resulting from any calculation
of the rate of interest on the Notes will be rounded, if necessary, to the
nearest one-hundred-thousandth of a percentage point (.0000001), with five
one-millionths of a percentage point rounded upward, and all dollar amounts
used in or resulting from such calculation will be rounded to the nearest
cent, with one-half cent rounded upward. The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the initial interest
rate).
"Federal Funds Rate" for each Interest Reset Date will be determined by the
Calculation Agent as follows:
As of the Interest Determination Date, the Calculation Agent will
determine the effective rate on such date for federal funds as published on
Telerate Page 120 under the heading "Daily Selected Money Market Rates From
The Federal Reserve," or, if not published by 3:00 P.M., New York City
time, on the related Interest Determination Date, the rate on such Interest
Determination Date as published by the Federal Reserve Bank of New York in
its daily statistical release "Composite 3:30 P.M. Quotations for U.S.
Government Securities" or any successor publication ("Composite
Quotations") under the column "Effective Rate" under the heading "Federal
Funds." If by 3:00 P.M., New York City time, on the related Interest
Determination Date such rate is not published either on Telerate Page 120
or in Composite Quotations, then the Federal Funds Rate on such Interest
Determination Date will be calculated by the Calculation Agent and will be
the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of
federal funds transactions in The City of New York selected by the
Calculation Agent prior to 9:00 A.M., New York City time, on such Interest
Determination Date; provided, however that if the brokers so selected by
the Calculation Agent are not quoting as mentioned in this sentence, the
Federal Funds Rate determined as of such Interest Determination Date will
be the Federal Funds Rate in effect on such Interest Determination Date.
"Telerate Page 120" means the display designated as page "120" on the
Telerate Service (or such other page as may replace the 120 page on that
service).
BOOK-ENTRY SYSTEM
Upon issuance, the Notes will be represented by a single Global Security
registered in the name of Cede & Co., as nominee of The Depository Trust
Company, which will act as the Depositary for the Notes. The Depositary has
advised the Company as follows: the Depositary is a limited-purpose
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trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. "Direct Participants" include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. Access to the Depositary's system is also
available to others, such as securities brokers and dealers, banks and trust
companies, that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with
the Securities and Exchange Commission.
Purchases of the Notes under the Depositary's system must be made by or
through Direct Participants. The ownership interest of each actual purchaser
of a Note (a "Beneficial Owner") will be recorded on the Direct and Indirect
Participants' records. Beneficial owners will not receive written confirmation
from the Depositary of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Notes are expected to be effected by entries made
on the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Book-Entry Notes, except as set forth under "Description of Debt Securities"
in the accompanying Prospectus.
As long as the Notes are held by the Depositary or its nominee and the
Depositary continues to make its same day funds settlement system available to
the Company, all payments of principal of and interest on the Notes will be
made by the Company in immediately available funds. The Company has been
advised that the Depositary's practice is to credit Direct Participants'
accounts on the applicable payment date unless the Depositary has reason to
believe that it will not receive payment on such date.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement system. Accordingly,
the Depositary will require that secondary trading activity in the Notes
settle in immediately available funds. No assurance can be given as to the
effect, if any, of settlement in immediately available funds on trading
activity in the Notes.
The Company expects that conveyance of notices and other communications by
the Depositary to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time. In
addition, neither the Depositary nor Cede & Co. will consent or vote with
respect to the Notes; the Company has been advised that the Depositary's usual
procedure is to mail an omnibus proxy to the Company as soon as possible after
the record date with respect to such consent or vote. The omnibus proxy would
assign Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts the Notes are credited on such record date (identified in a
listing attached to the omnibus proxy).
See "Description of Debt Securities" in the accompanying Prospectus for
further information regarding Global Securities.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to Lehman Brothers Inc. (the "Underwriter"),
and the Underwriter has agreed to purchase, the Notes.
Under the terms and conditions of the Underwriting Agreement, the
Underwriter is committed to take and pay for all of the Notes, if any are
taken.
The Underwriter proposes to offer the Notes from time to time in negotiated
transactions or otherwise at varying prices to be determined at the time of
each sale. In connection with the sale of any Notes, the Underwriter may be
deemed to have received compensation from the Company equal to the difference
between the amount received by the Underwriter upon the sale of such Notes and
the price at which the Underwriter purchased such Notes from the Company. In
addition, the Underwriter may sell Notes to or through certain securities
dealers, and such dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Underwriter and/or any
purchasers of Notes for whom it may act as agent (which compensation may be in
excess of customary commissions). The Underwriter may also receive
compensation from the purchasers of Notes for whom it may act as agent.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriter that the Underwriter intends
to make a market in the Notes but it is not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
In the ordinary course of business, the Underwriter has engaged from time to
time in investment banking business with the Company.
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PROSPECTUS
[LOGO OF INTERNATIONAL LEASE FINANCE CORPORATION]
INTERNATIONAL LEASE FINANCE CORPORATION
DEBT SECURITIES
International Lease Finance Corporation (the "Company") intends to issue
from time to time debt securities (the "Debt Securities") with an aggregate
offering price of up to $2,110,580,000, which will be offered to the public on
terms determined by market conditions at the time of sale. The Debt Securities
shall be issued in U.S. dollar denominations or, at the option of the Company,
if so specified in the applicable Prospectus Supplement (the "Prospectus
Supplement"), in any other currency, including composite currencies such as
the European Currency Unit. The Debt Securities may be issued in one or more
series with the same or various maturities at par or with an original issue
discount. The specific designation, aggregate principal amount, purchase
price, maturity, interest rate (which may be fixed or variable), time of
payment of interest, any terms for redemption, any other specific terms, and
any listing on a securities exchange of Debt Securities in respect of which
this Prospectus is being delivered (the "Offered Debt Securities") are set
forth in the accompanying Prospectus Supplement together with the terms of
offering of the Offered Debt Securities. Unless otherwise specified in the
accompanying Prospectus Supplement, the Debt Securities of each series will be
issued in the form of one or more Global Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
The Debt Securities will be sold directly through agents designated from
time to time or through underwriters or dealers. If any agents of the Company
or any underwriters are involved in the sale of the Offered Debt Securities,
the names of such agents or underwriters and any applicable commissions or
discounts are set forth in the accompanying Prospectus Supplement. The net
proceeds to the Company from such sale are also set forth in the accompanying
Prospectus Supplement.
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The date of this Prospectus is June 14, 1996
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by the
Company can be inspected and copied at the Public Reference Room of the
Commission, Room 1024, at 450 Fifth Street, N.W., Washington, D.C., 20549 and
at the Commission's regional offices at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such materials can be
obtained at prescribed rates from the Public Reference Room of the Commission,
Room 1024, at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus and the accompanying Prospectus Supplement do not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to
the Registration Statement, which may be examined without charge at the public
reference facilities maintained by the Commission at the Public Reference Room
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies thereof may be obtained from the Commission upon payment of the
prescribed fees.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1995, its Quarterly Report on Form 10-Q, as amended by Form 10-Q/A, for the
quarter ended March 31, 1996 and its Current Report on Form 8-K, event date
January 4, 1996, filed by the Company with the Commission are incorporated
herein by reference.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the Offered Debt Securities shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein, in a Prospectus
Supplement or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, in a
Prospectus Supplement or in any subsequently filed document which is
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, A COPY OF ANY OR ALL OF
THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (NOT INCLUDING EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN
SUCH DOCUMENTS). REQUESTS SHOULD BE DIRECTED TO: ALAN H. LUND, EXECUTIVE VICE
PRESIDENT, CO-CHIEF OPERATING OFFICER AND CHIEF FINANCIAL OFFICER,
INTERNATIONAL LEASE FINANCE CORPORATION, 1999 AVENUE OF THE STARS, 39TH FLOOR,
LOS ANGELES, CALIFORNIA 90067 (TELEPHONE: (310) 788-1999).
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THE COMPANY
The Company is primarily engaged in the acquisition of new and used
commercial jet aircraft and the leasing and sale of such aircraft to domestic
and foreign airlines. The Company, in terms of the number and value of
transactions concluded, is a major owner-lessor of commercial jet aircraft.
Since its formation in 1973, the Company has engaged in over 750 transactions
involving the lease or sale of commercial aircraft to more than 140 airlines.
In addition, the Company is engaged in the remarketing of commercial jet
aircraft for its own account, for airlines and for financial institutions. At
December 31, 1995, the Company had committed to purchase, or had secured
positions for (which were subsequently committed), 292 aircraft deliverable
through 2004 at an estimated aggregate purchase price of $15.9 billion. It
also had options to purchase an additional 34 aircraft deliverable through
2005 at an estimated aggregate purchase price of $2.5 billion.
The Company is a wholly owned subsidiary of American International Group,
Inc. ("AIG").
The Company is incorporated in the State of California and its principal
executive offices are located at 1999 Avenue of the Stars, 39th Floor, Los
Angeles, California 90067, with a telephone and telecopier number of (310)
788-1999 and (310) 788-1990, respectively.
AMERICAN INTERNATIONAL GROUP, INC.
AIG is a holding company which through its subsidiaries is primarily engaged
in a broad range of insurance and insurance-related activities in the United
States and abroad. AIG's primary activities include both general and life
insurance operations. The principal insurance company subsidiaries are
American Home Assurance Company, National Union Fire Insurance Company of
Pittsburgh, Pa., New Hampshire Insurance Company, Lexington Insurance Company,
American International Underwriters Overseas, Ltd., American Life Insurance
Company, American International Assurance Company, Limited, The Philippine
American Life Insurance Company, American International Reinsurance Company,
Ltd. and United Guaranty Residential Insurance Company. Other significant
activities are financial services and insurance agency and service fee
operations. The Common Stock of AIG is listed on, among others, the New York
Stock Exchange.
THE DEBT SECURITIES WILL NOT BE OBLIGATIONS OF, OR GUARANTEED BY, AIG.
USE OF PROCEEDS
Unless otherwise stated in the accompanying Prospectus Supplement, proceeds
to be received from the sale of the Debt Securities offered hereby will be
used, together with internally generated funds, for general corporate
purposes, including the acquisition of aircraft. Pending ultimate application,
the proceeds from the sale of the Debt Securities will be invested in
marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for the periods shown.
YEARS ENDED DECEMBER 31,
---------------------------------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
1.44x 1.75x 1.70x 1.63x 1.48x
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, "earnings" consist of income before income
taxes plus fixed charges (excluding capitalized interest), and "fixed charges"
consist of interest expense and capitalized interest.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be unsecured obligations issued under an indenture
dated as of November 1, 1991 (the "Indenture"), between the Company and First
Trust of Illinois, National Association (successor to Continental Bank,
National Association), as trustee (the "Trustee"). The following summaries of
certain provisions of the Debt Securities and the Indenture do not purport to
be complete and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the Indenture (a copy of which is filed
as an exhibit to the Registration Statement), including the definitions
therein of certain terms and the provisions of certain terms which are made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended. Capitalized terms used in the following summaries and not otherwise
defined herein shall have the meanings ascribed to them in the Indenture.
The particular terms of the Offered Debt Securities and the extent, if any,
to which such general provisions may apply to the Offered Debt Securities will
be described in the Prospectus Supplement relating to such Offered Debt
Securities.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated debt of the Company. The Indenture does not limit the amount of
debt which may be issued by the Company under the Indenture or otherwise. The
Debt Securities may be issued in one or more series with the same or various
maturities, at par or with an original issue discount. Federal income tax
consequences and other special considerations applicable to any Debt
Securities issued with an original issue discount will be described in the
Prospectus Supplement relating thereto.
Reference is made to the accompanying Prospectus Supplement for the
following terms of the Offered Debt Securities: (i) the title of the Offered
Debt Securities; (ii) any limit upon the aggregate principal amount of the
Offered Debt Securities; (iii) the Person to whom any interest on an Offered
Debt Security shall be payable if other than the Person in whose name that
Offered Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the relevant Regular Record Date; (iv) the date or
dates on which the principal of the Offered Debt Securities is payable; (v)
the rate or rates (which may be fixed or variable), or the formula pursuant to
which such rate or rates will be determined, at which the Offered Debt
Securities will bear interest, if any, and the date or dates from which such
interest will accrue, the Interest Payment Dates on which such interest, if
any, will be payable and the Regular Record Dates for such Interest Payment
Dates; (vi) the place or places where the principal of (and premium, if any)
and interest, if any, on the Offered Debt Securities will be payable; (vii)
any mandatory or optional sinking fund or analogous provisions, the periods
during which and the price or prices at which the Offered Debt Securities may,
pursuant to such funds, provisions or otherwise, be redeemed at the option of
the Company or of any Holder thereof and the other terms and provisions
thereof; (viii) the currency or currencies in which the Offered Debt
Securities are payable; (ix) if applicable, the manner of determining the
amount of principal of or premium or interest on the Offered Debt Securities
if such amount is determined with reference to an index; (x) the principal
amount of the Offered Debt Securities which will be payable upon declaration
of acceleration of the Maturity thereof; (xi) whether the Offered Debt
Securities which will be issued in whole or in part in the form of one or more
Global Securities; (xii) any additional Events of Default provided with
respect to the Offered Debt Securities; and (xiii) any other terms of the
Offered Debt Securities.
DENOMINATION AND EXCHANGE
Unless otherwise indicated in the accompanying Prospectus Supplement for a
particular issue, the Debt Securities of each series will be issued in the
form of one or more Global Securities
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registered in the name of Cede & Co., as nominee of the Depositary (as
hereinafter defined). See "Global Securities" below. Unless otherwise
indicated in the accompanying Prospectus Supplement for a particular issue of
Debt Securities in the form of Global Securities, principal, premium, if any,
and interest, if any, is to be payable as described under "Global Securities"
below. Unless otherwise indicated in the accompanying Prospectus Supplement
for a particular issue of Debt Securities not in the form of Global Securities
but in the form of definitive certificates ("Certificated Securities"),
principal, premium, if any, and interest, if any, is to be payable to
registered Holders of such Certificated Securities at the office of the
Trustee maintained for that purpose in the Borough of Manhattan, City and
State of New York, or at any paying agency maintained at the time by the
Company for such purpose. At the option of the Company, payment of interest to
registered Holders of Certificated Securities may be made by check mailed to
the address of the person entitled thereto as it appears on the register for
such Certificated Securities. Unless otherwise indicated in the accompanying
Prospectus Supplement for a particular issue, Certificated Securities may be
presented for registration of transfer or exchange at such office of the
Trustee in New York, New York, or at such other location or locations as may
be established pursuant to the Indenture without any service charge but
subject to the limitations provided in the Indenture.
CERTAIN COVENANTS OF THE COMPANY
Restrictions on Liens. The Company will not, and will not permit any
Restricted Subsidiary to, issue, assume or guarantee any indebtedness for
borrowed money secured by any mortgage, pledge, lien or other encumbrance of
any nature (herein collectively referred to as a "mortgage" or "mortgages")
upon any property of the Company or any Restricted Subsidiary, or on any
shares of stock of any Restricted Subsidiary, without in any such case
effectively providing that the Debt Securities (together with, if the Company
shall so determine, any other indebtedness of the Company or such Restricted
Subsidiary ranking equally with the Debt Securities) shall be secured equally
and ratably with such indebtedness for borrowed money, except that the
foregoing restrictions shall not apply to: (a) mortgages existing on November
1, 1991; (b) certain mortgages securing all or a part of the purchase price of
property (other than property acquired for lease to a Person other than the
Company or a Restricted Subsidiary); (c) mortgages on the property of a
Restricted Subsidiary existing at the time it became a Restricted Subsidiary;
(d) mortgages securing indebtedness for borrowed money of a Restricted
Subsidiary owing to the Company or another Restricted Subsidiary; (e)
mortgages on property of a corporation existing at the time such corporation
is merged into or consolidated with the Company or a Restricted Subsidiary or
at the time the Company or a Restricted Subsidiary purchases, leases or
otherwise acquires the properties of such other corporation as an entirety or
substantially as an entirety; (f) the replacement of any of the foregoing,
provided that the principal amount of the indebtedness for borrowed money
secured by the mortgage shall not be increased and the principal repayment
schedule and maturity of such indebtedness shall not be extended and the
mortgage shall be limited to the property or part thereof which secured the
mortgage so replaced or property substituted therefor as a result of the
destruction, condemnation or damage of such property; (g) liens in connection
with certain legal proceedings; (h) liens for certain taxes or assessments,
landlord's liens and charges incidental to the conduct of the business, or the
ownership of the property and assets, of the Company or a Restricted
Subsidiary, which are not incurred in connection with the borrowing of money
and which do not, in the opinion of the Company, materially impair the use of
such property in the operation of the business of the Company or a Restricted
Subsidiary or the value of such property for the purpose of such business; and
(i) mortgages which would otherwise be subject to the foregoing restrictions
which, when the indebtedness for borrowed money relating to those mortgages is
added to all other then outstanding indebtedness for borrowed money of the
Company and the Restricted Subsidiaries secured by mortgages and not listed in
clauses (a) through (h) above, does not exceed 12.5% of the Consolidated Net
Tangible Assets of the Company.
5
<PAGE>
Restrictions as to Dividends and Certain Other Payments. No dividend shall
be paid or declared nor shall any distributions be made on any capital stock
of the Company (except in shares of, or warrants or rights to subscribe for or
purchase shares of, capital stock of the Company), nor shall any payment be
made by the Company or any Restricted Subsidiary to acquire or retire shares
of such stock, at a time when an Event of Default has occurred and is
continuing under the Indenture constituting a (i) default in the payment of
interest on the Debt Securities of that series when due, continued for 30
days; (ii) default in the payment of the principal and premium, if any, on the
Debt Securities of that series when due either at maturity, upon redemption,
by declaration or otherwise; or (iii) default in the deposit of any sinking
fund payment with respect to Debt Securities of that series when and as due.
Restrictions on Investments in Non-Restricted Subsidiaries. The Company will
not, nor will it permit any Restricted Subsidiary to, make any investment in,
or transfer any assets to, a Non-Restricted Subsidiary if immediately
thereafter the Company would be in breach of or in default in the performance
of any covenant or warranty of the Company contained in the Indenture.
Limited Covenants in the Event of a Highly Leveraged Transaction. Other than
the covenants of the Company included in the Indenture as described above and
as described under "Description of Debt Securities--Merger and Sale of
Assets", there are no covenants or provisions in the Indenture that may afford
Holders protection in the event of a highly leveraged transaction, leveraged
buyout, reorganization, restructuring, merger or similar transaction involving
the Company.
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in the
Indenture:
"Consolidated Net Tangible Assets" means the total amount of assets (less
depreciation and valuation reserves and other reserves and items deductible
from gross book value of specific asset accounts under generally accepted
accounting principles) which under generally accepted accounting principles
would be included on a balance sheet of the Company and its Restricted
Subsidiaries, after deducting therefrom (a) all liability items except
indebtedness (whether incurred, assumed or guaranteed) for borrowed money
maturing by its terms more than one year from the date of creation thereof or
which is extendible or renewable at the sole option of the obligor in such
manner that it may become payable more than one year from the date of creation
thereof, shareholder's equity and reserves for deferred income taxes, (b) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, which in each case would be so included on
such balance sheet, and (c) amounts invested in, or equity in the net assets
of, Non-Restricted Subsidiaries.
"Restricted Subsidiaries" means all Subsidiaries other than Non-Restricted
Subsidiaries. "Non-Restricted Subsidiaries" means (a) any Subsidiary so
designated by the Board of Directors of the Company in accordance with the
Indenture, and (b) any other Subsidiary of which the majority of the voting
stock is owned directly or indirectly by one or more Non-Restricted
Subsidiaries, if such other Subsidiary is a corporation, or in which the Non-
Restricted Subsidiary is a general partner, if such other Subsidiary is a
limited partnership. Pursuant to specified conditions in the Indenture, the
Company's Board of Directors may change the designations of Restricted
Subsidiaries and Non-Restricted Subsidiaries.
"Subsidiary" means any corporation, partnership, or trust more than 50% of
the Voting Stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
6
<PAGE>
AMENDMENT, SUPPLEMENT AND WAIVER
The Indenture may be amended or supplemented with the consent of the Holders
of not less than a majority in principal amount of the Debt Securities at the
time outstanding of each series affected by such amendment or supplement, and
any past default and its consequences may be waived with the consent of the
Holders of a majority in principal amount of the Debt Securities at the time
outstanding of each series affected by such default; provided that, without
the consent of the Holders of all of the Debt Securities affected thereby, no
such amendment, supplement or waiver may change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Debt
Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or change the
stated maturity of any Debt Security (or reduce the amount payable upon a
declaration of acceleration of the Debt Security), or change the time for
payment of any interest on any Debt Securities, or make any Debt Security
payable in money other than that stated in the Debt Security, or reduce the
aforesaid percentage of principal amount of Debt Securities whose Holders must
consent to an amendment, supplement or waiver. Without the consent of any
Holder of Debt Securities, the Company may amend or supplement the Indenture
to, among other things, evidence succession of another corporation to the
Company, to add covenants or additional Events of Default for the benefit of
the Holders of all or any series of Debt Securities, to cure any ambiguity,
correct any provision of the Indenture inconsistent with other provisions
thereof or make any other provision which does not adversely affect the
interests of the Holders of Debt Securities in any material respect, or to
change or eliminate any provision of the Indenture if such change or
elimination is effective only when there are no Debt Securities outstanding
which were issued prior to such change or elimination and entitled to the
benefit of such provision.
EVENTS OF DEFAULT
The Indenture defines an Event of Default as being any one of the following
events: (a) default in the payment of any interest on the Debt Securities of
that series when due, continued for 30 days; (b) default in the payment of the
principal and premium, if any, on the Debt Securities of that series when due
either at maturity, upon redemption, by declaration or otherwise; (c) default
in the deposit of any sinking fund payment of the Debt Securities of that
series when and as due; (d) default in the performance of any other of the
Company's covenants in the Indenture (other than a covenant included in the
Indenture solely for the benefit of a series of Debt Securities other than
that series) continued for 60 days after written notice; (e) default under any
mortgage, indenture (including the Indenture) or instrument under which is
issued or which secures or evidences indebtedness for borrowed money of the
Company or any Restricted Subsidiary which default constitutes a failure to
pay principal of such indebtedness in an amount exceeding $20,000,000 when due
and payable (other than as a result of acceleration) or results in
indebtedness for borrowed money in the aggregate of $20,000,000 or more
becoming or being declared due and payable before it would otherwise become
due and payable, and such acceleration is not rescinded or annulled, or such
indebtedness for borrowed money is not discharged, within 30 days after
written notice to the Company by the Trustee, or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the Debt
Securities of that series at the time outstanding; (f) certain events in
bankruptcy, insolvency or reorganization; and (g) any other events of default
provided with respect to the Offered Debt Securities. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Debt Securities of each series affected thereby may
declare the Debt Securities of that series to be due and payable immediately,
but under certain conditions such acceleration may be rescinded by the Holders
of a majority in principal amount of the Debt Securities of each series
affected thereby.
No Holder of any Debt Security of a series will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder previously shall have
7
<PAGE>
given to the Trustee written notice of an Event of Default and unless also the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of that series shall have made written request upon the Trustee,
and have offered indemnity satisfactory to the Trustee to institute such
proceeding as Trustee, and the Trustee for 60 days shall have failed to
institute such proceeding. However, the right of any Holder of any Debt
Security to institute suit for enforcement of any payment of principal of, and
premium, if any, and interest on, such Debt Security on or after the due date
expressed in such Debt Security, may not be impaired or affected without such
Holder's consent.
The Holders of a majority in principal amount of Debt Securities of any
series at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to Debt
Securities of that series. However, the Trustee may refuse to follow any such
direction that conflicts with any rule of law or the Indenture. Before
proceeding to exercise any right or power under the Indenture at the direction
of such Holders, the Trustee shall be entitled to receive from such Holders
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with any such direction. The
Trustee may withhold from Holders of Debt Securities notice of any continuing
default (except a default in payment of principal, premium, if any, or
interest) if it determines that withholding notice is in their interests.
The Company will be required to furnish to the Trustee within 120 days after
the end of each fiscal year, a statement as to whether any default under the
Indenture occurred during the fiscal year.
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the accompanying Prospectus Supplement, the
Company may discharge (a "defeasance") its obligations with respect to the
outstanding Debt Securities of such series (other than certain obligations to
the Trustee and the Company's obligations with respect to the registration,
transfer and exchange of certificated Debt Securities, mutilated, destroyed,
lost and stolen certificated Debt Securities, the maintenance of an office or
agency in the Place of Payment and the treatment of funds held by Paying
Agents), or may be released from the restrictions described under "Certain
Covenants of the Company" above and any other provisions identified in the
accompanying Prospectus Supplement ("covenant defeasance") if, among other
things, (i) the Company has irrevocably deposited or caused to be deposited
with the Trustee (or other satisfactory trustee), as trust funds for the
payment of such Debt Securities, money, U.S. Government Obligations (as
defined below) which through the scheduled payment of principal and interest
will provide money, or a combination thereof, in an amount sufficient, without
reinvestment, to pay and discharge at maturity or redemption the entire amount
of principal of (and premium, if any) and interest on such Debt Securities;
(ii) no Event of Default or event which with notice or lapse of time or both
would become an Event of Default with respect to such Debt Securities shall
have occurred or be continuing on the date of such deposit and, for certain
purposes, at any time during the period ending on the 123rd day after the date
of deposit, or any longer preference period; (iii) such defeasance or covenant
defeasance shall not cause the Trustee to have a conflicting interest as
referred to in the Indenture; and (iv) such defeasance or covenant defeasance
will not result in a breach or violation of the Indenture or other material
agreements or instruments of the Company or cause the Debt Securities, if
listed on a national securities exchange, to be delisted.
In addition, in the case of defeasance, the Company is required to deliver
to the Trustee an opinion of counsel stating that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling,
or (ii) since the date of the Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that the
Holders of the outstanding Debt Securities of the series to be defeased will
not recognize income, gain or loss for Federal income tax
8
<PAGE>
purposes as a result of such defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred. In the case of a
covenant defeasance, the Company is required to deliver to the Trustee an
opinion of counsel to the effect that the Holders of the outstanding Debt
Securities of the series for which covenant defeasance is proposed will not
recognize income, gain or loss for Federal income tax purposes as a result of
such covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if the covenant defeasance had not occurred.
"U.S. Government Obligations" is defined in the Indenture as securities that
are (i) direct obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
MERGER AND SALE OF ASSETS
The Company may consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to
any Person, and another Person may consolidate with and merge into the Company
or convey, transfer or lease its properties and assets substantially as an
entirety to the Company only if (i) the Person formed by such consolidation or
surviving such merger or to which such assets or properties are conveyed,
transferred or leased is a corporation, partnership or trust organized and
validly existing under the laws of the United States, any State or the
District of Columbia and such Person expressly assumes the Company's
obligations under the Indenture; (ii) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, has happened and is
continuing; and (iii) if property or assets of the Company have become subject
to a mortgage, pledge, lien, security interest or other encumbrance not
permitted by the Indenture, the Company and such Person have taken appropriate
steps to secure any of the Debt Securities equally and ratably with the
securities secured thereby.
Upon such consolidation, merger or conveyance, transfer or lease, the
successor Person shall be substituted for the Company under the Indenture and,
except in the case of such a lease, the Company shall be relieved of all
obligations under the Indenture.
GLOBAL SECURITIES
Unless otherwise specified in the accompanying Prospectus Supplement, the
Debt Securities of a series will be issued in the form of one or more fully
registered Global Securities registered in the name of Cede & Co., as nominee
of The Depository Trust Company, which will act as the Depositary for the Debt
Securities (the "Depositary"). Unless and until it is exchanged in whole or in
part for Debt Securities in definitive registered form, a Global Security may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor of the Depositary or a nominee of such successor.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the
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<PAGE>
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. "Direct Participants" include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. Access to the Depositary's system is also
available to others, such as securities brokers and dealers, banks and trust
companies, that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with
the Securities and Exchange Commission.
Unless otherwise specified in the accompanying Prospectus Supplement, the
Company anticipates that the following provisions will apply to all depositary
arrangements.
Upon the issuance of a Global Security, the Company expects that the
Depositary will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of the applicable Direct Participants. The
accounts to be credited shall be designated by any underwriters or agents
participating in the distribution of such Debt Securities. Purchases of Debt
Securities under the Depositary's system must be made by or through Direct
Participants. The ownership interest of each actual purchaser of Debt
Securities (a "Beneficial Owner") will be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from the Depositary of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Debt Securities are expected to be effected by
entries made on the books of Participants acting on behalf of Beneficial
Owners. So long as the Depositary or its nominee is the registered owner of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or Holder of the Debt Securities represented by such
Global Security for all purposes under the Indenture. Except as set forth
below, Beneficial Owners will not be entitled to have the Debt Securities
represented by a Global Security registered in their names, will not receive
or be entitled to receive physical delivery of such Debt Securities in
definitive form and will not be considered the owners or Holders thereof under
the Indenture.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Global Security registered in the name of the Depositary or
its nominee will be made to the Depositary or its nominee, as the case may be,
as the registered owner of such Global Security. None of the Company, the
Trustee or any paying agent for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in such Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that, upon receipt of any payment of principal, premium
or interest, the Depositary will immediately credit Direct Participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of the Depositary. The Company also expects that payments by Direct
Participants to Indirect Participants and by Direct and Indirect Participants
to Beneficial Owners will be governed by standing instructions and customary
practices, as is now the case with the securities held for the accounts of
customers registered in "street names" and will be the responsibility of the
Participants.
10
<PAGE>
As long as the Debt Securities are held by the Depositary or its nominee and
the Depositary continues to make its same day funds settlement system
available to the Company, all payments of principal and interest on the Debt
Securities will be made by the Company in immediately available funds. The
Company has been advised that the Depositary's practice is to credit Direct
Participants' accounts on the applicable payment date unless the Depositary
has reason to believe that it will not receive payment on such date.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, it is
anticipated that the Debt Securities will trade in the Depositary's Same-Day
Funds Settlement system. Accordingly, the Depositary will require that
secondary trading activity in the Debt Securities settle in immediately
available funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in the Debt
Securities.
The Company expects that conveyance of notices and other communications by
the Depositary to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time. In
addition, neither the Depositary nor Cede & Co. will consent or vote with
respect to the Debt Securities; the Company has been advised that the
Depositary's usual procedure is to mail an omnibus proxy to the Company as
soon as possible after the record date with respect to such consent or vote.
The omnibus proxy would assign Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts the Debt Securities are credited
on such record date (identified in a listing attached to the omnibus proxy).
If the Depositary is at any time unwilling or unable to continue as
Depositary for a series of Debt Securities and a successor Depositary is not
appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Global Security. In
addition, the Company may at any time and in its sole discretion determine not
to have any of the Debt Securities of a series represented by one or more
Global Securities and, in such event, will issue Debt Securities of such
series in definitive form in exchange for all of the Global Security or
Securities representing such Debt Securities.
The laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in Debt Securities represented by
Global Securities.
THE TRUSTEE
The Trustee has been and from time to time is an unsecured lender to the
Company. The Company may maintain deposit accounts and conduct other banking
transactions with the Trustee in the ordinary course of business.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in any of three ways: (i) through
underwriters or dealers; (ii) directly to purchasers or to a single purchaser;
or (iii) through agents. The accompanying Prospectus Supplement with respect
to the Offered Debt Securities sets forth the terms of the offering of the
Offered Debt Securities, including the name or names of any underwriters or
agents, the purchase price of the Offered Debt Securities and the proceeds to
the Company from such sale, any underwriting discounts, agents' commissions
and other items constituting underwriters' compensation, any initial public
offering price and any discounts or concessions allowed or reallowed or paid
to dealers and any securities exchanges on which the Offered Debt Securities
may be listed.
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<PAGE>
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
Debt Securities may be offered to the public through underwriting syndicates
which may be represented by managing underwriters. Such firms may from time to
time purchase and sell Debt Securities in the secondary market, but they are
not obligated to do so. No assurance can be given that there will be a
secondary market for the Debt Securities. Unless otherwise set forth in the
accompanying Prospectus Supplement, the obligations of the underwriters to
purchase the Offered Debt Securities will be subject to certain conditions
precedent and the underwriters will be obligated to purchase all the Offered
Debt Securities if any are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Offered Debt Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Debt Securities in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the accompanying Prospectus
Supplement. Unless otherwise indicated in the accompanying Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment. Any such agent may be deemed to be an underwriter
as that term is defined in the Securities Act.
If so indicated in the accompanying Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase Offered Debt Securities from the Company at
the public offering price set forth in the accompanying Prospectus Supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject only to those
conditions set forth in the accompanying Prospectus Supplement and the
accompanying Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
Agents and underwriters may be entitled under agreements to be entered into
with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engage in transactions with, or perform services for the Company in the
ordinary course of business.
EXPERTS
The consolidated financial statements of International Lease Finance
Corporation and subsidiaries appearing in International Lease Finance
Corporation's Annual Report (Form 10-K) for the year ended December 31, 1995,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the Debt Securities offered hereby is being
passed upon for the Company by O'Melveny & Myers LLP. Milbank, Tweed, Hadley &
McCloy, Los Angeles, California will pass upon certain legal matters for the
underwriters or agents.
12
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NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDER-
WRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OF-
FER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OF-
FERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUP-
PLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Use of Proceeds............................................................ S-2
Description of the Notes................................................... S-2
Underwriting............................................................... S-5
PROSPECTUS
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
The Company................................................................ 3
American International Group, Inc.......................................... 3
Use of Proceeds............................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 11
Experts.................................................................... 12
Legal Matters.............................................................. 12
</TABLE>
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$100,000,000
[LOGO OF INTERNATIONAL LEASE FINANCE CORPORATION]
INTERNATIONAL LEASE FINANCE CORPORATION
FLOATING RATE NOTES DUE NOVEMBER 2, 1998
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PROSPECTUS SUPPLEMENT
October 18, 1996
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LEHMAN BROTHERS
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