<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
File No. 333-29049
Prospectus Supplement (To Prospectus Dated June 23, 1997)
ARISTAR, INC.
$200,000,000 ARISTAR LOGO
6.00% SENIOR NOTES DUE AUGUST 1, 2001
Aristar, Inc. (the "Company") is offering $200,000,000 aggregate principal
amount of 6.00% Senior Notes due August 1, 2001 (the "Notes"). Interest on the
Notes is payable on February 1 and August 1 of each year, beginning February 1,
1999. The Notes will mature on August 1, 2001. The Notes are not redeemable
prior to their maturity.
The Notes will be represented by one or more Global Securities deposited with a
custodian for and registered in the name of a nominee of The Depository Trust
Company ("DTC"). Beneficial interests in the Notes will be shown on, and
transfers thereof will be effected only through, records maintained by DTC and
its participants. Except as described in the accompanying Prospectus, Notes will
not be issued in certificated form. See "Description of Debt
Securities -- Global Securities" in the accompanying Prospectus.
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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 TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note 99.826% 0.350% 99.476%
Total $199,652,000 $700,000 $198,952,000
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from July 31, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."
(3) Before deducting estimated expenses of $250,000 payable by the Company.
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The Notes are offered by the several Underwriters, subject to prior sale, when,
as and if issued by the Company and accepted by the Underwriters and subject to
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the Notes will be made in book-entry form through the
facilities of DTC on or about July 31, 1998, against payment therefor in
immediately available funds.
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
DEUTSCHE BANK SECURITIES
LEHMAN BROTHERS
NESBITT BURNS SECURITIES INC.
The date of this Prospectus Supplement is July 28, 1998.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
OVER-ALLOTMENT, STABILIZING AND SYNDICATE SHORT-COVERING TRANSACTIONS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
------------------------
RECENT DEVELOPMENTS
The Company is an indirect, wholly-owned subsidiary of Washington Mutual,
Inc. ("Washington Mutual"). Neither Washington Mutual nor any of Washington
Mutual's other subsidiaries has (i) any obligation, direct or otherwise, with
respect to any of the Debt Securities, including the Notes, or (ii) any
obligation to maintain the net worth of the Company.
During the second quarter of 1998, Washington Mutual named Craig J. Chapman
as the Company's Chief Executive Officer. Mr. Chapman's responsibilities include
the development and implementation of a long-term growth strategy.
Net income was $13.6 million for the quarter ended June 30, 1998, an
increase of 4.3% from the quarter ended June 30, 1997. The Company had net
interest income of $68.0 million before provision for credit losses for the
quarter ended June 30, 1998, an increase of 10.7% from the quarter ended June
30, 1997. The Company made a provision for credit losses of $18.3 million for
the quarter ended June 30, 1998, which increased its allowance for credit losses
at June 30, 1998 to $76.1 million after net charge-offs and allowances on notes
purchased. Other operating expense of $9.0 million for the quarter ended June
30, 1998 was up 0.4% compared to the same period in 1997. For the quarter ended
June 30, 1998, the Company's net consumer finance receivables outstanding were
$2.2 billion, an increase of 6.3% from the quarter ended June 30, 1997. At June
30, 1998, the Company had non-performing assets of $51.1 million, representing
2.0% of the Company's total assets. Results for the three months or six months
ended June 30, 1998 are not necessarily indicative of results that may be
expected for the fiscal year ending December 31, 1998.
USE OF PROCEEDS
Of the net proceeds available to the Company from the sale of the Notes,
$150 million will be used by the Company to reduce outstanding commercial paper.
The net proceeds of such commercial paper were used to pay at maturity $150
million of the aggregate principal amount of the Company's 5.75% Senior Notes
due July 15, 1998. The remainder of the net proceeds available to the Company
from the sale of the Notes will be used by the Company to pay at maturity a
portion of the aggregate principal amount of its 8.875% Senior Subordinated
Notes due August 15, 1998.
DESCRIPTION OF NOTES
The Notes will be unsecured and unsubordinated general obligations of the
Company maturing on August 1, 2001, and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. The Notes will be
issued in fully registered form only and in denominations of $100,000 and any
larger amount that is an integral multiple of $1,000. The Notes will bear
interest at the rate per annum set forth on the cover page of this Prospectus
Supplement from July 31, 1998, payable semiannually on February 1 and August 1,
commencing February 1, 1999, to the persons in whose names the Notes are
registered at the close of business on the January 15 or July 15 next preceding
the respective interest payment date. Principal of and interest on the Notes
will be payable at the office or agency of the Company for such purpose in New
York City or, at the option of the Company, payment of interest may be made by
check mailed to the registered holder. The Notes may not be redeemed prior to
maturity. Capitalized terms used herein and not otherwise defined are used with
the meanings ascribed to them in the accompanying Prospectus.
The terms of the Notes as established by the Company provide that the
Company may at any time (including more than one year prior to the Stated
Maturity of the Notes) be discharged from its obligations thereon by providing
for payment when due of the principal of, and interest on, the Notes and by
satisfying
S-2
<PAGE> 3
certain other conditions, all as described under "Description of Debt Securities
- -- Satisfaction and Discharge" in the accompanying Prospectus.
The Notes constitute a single series for purposes of the Senior Indenture
and are limited to $200,000,000 in aggregate principal amount. See "Description
of Debt Securities" in the accompanying Prospectus for a description of the
rights of all the Senior Debt Securities, including the Notes, issued under the
Senior Indenture.
The Notes will be represented by one or more Global Securities that will be
deposited with, or on behalf of, DTC. To facilitate subsequent transfers, the
Notes will be registered in the name of DTC's partnership nominee, Cede & Co.
The deposit of the Notes with DTC and their registration in the name of Cede &
Co. will effect no change in beneficial ownership. See "Description of Debt
Securities -- Global Securities -- Book-Entry Securities" in the accompanying
Prospectus.
Settlement of Notes deposited with DTC will be made in DTC's Same-Day Funds
Settlement System. The Notes will trade in such system until maturity, and
secondary market trading activity for the Notes will therefore settle in
immediately available funds. All payments of principal and interest will be made
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.
DTC is a limited-purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). DTC was created to hold
securities for its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
DTC may discontinue providing its services as securities depositary with
respect to the Notes at any time by giving reasonable notice to the Company or
the Senior Trustee, or the Company may decide to discontinue use of the system
of book-entry transfers through DTC. Under such circumstances, in the event that
a successor securities depositary is not obtained, certificates will be printed
and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources (including DTC) that the Company believes to be
reliable, but the Company takes no responsibility for its accuracy.
NONE OF THE COMPANY, THE TRUSTEE, ANY PAYING AGENT OR THE SECURITY
REGISTRAR FOR THE NOTES WILL HAVE ANY RESPONSIBILITY OR LIABILITY FOR ANY ASPECT
OF THE RECORDS RELATING TO OR PAYMENTS MADE ON ACCOUNT OF BENEFICIAL OWNERSHIP
INTERESTS IN ANY GLOBAL SECURITY OR FOR MAINTAINING, SUPERVISING OR REVIEWING
ANY RECORDS RELATING TO SUCH BENEFICIAL OWNERSHIP INTERESTS.
S-3
<PAGE> 4
SUMMARY FINANCIAL INFORMATION
The following table summarizes selected financial data for the Company. The
information for each of the three fiscal years during the period ended December
31, 1997, and for the three-month periods ended March 31, 1997 and 1998, has
been derived from and is qualified in its entirety by reference to the financial
statements and other information incorporated by reference in the accompanying
Prospectus as described in the Prospectus under "Incorporation of Certain
Documents by Reference." The information with respect to the three-month periods
ended March 31, 1997 and 1998, is unaudited, but in the opinion of management
includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of such information. Results for the three
months ended March 31, 1998, are not necessarily indicative of results that may
be expected for the fiscal year ending December 31, 1998.
On April 30, 1996, Great Western Bank, a Federal Savings Bank ("GWB"),
transferred to the Company a portion of its consumer finance business,
hereinafter referred to as Great Western Financial Services ("GWFS"). GWB was
then a wholly-owned subsidiary of Great Western Financial Corporation ("Great
Western"), which was the indirect parent of the Company prior to the merger of
Great Western with and into a wholly-owned subsidiary of Washington Mutual on
July 1, 1997. GWFS was comprised primarily of approximately $242 million in net
consumer finance receivables. The Company paid fair value (as determined by
independent appraisal) of approximately $252 million in cash. The Company
accounted for the approximately $10 million premium as a dividend to Great
Western. Additionally, at the purchase date, the Company recorded a transfer to
GWB of approximately $15 million, representing the accumulated earnings of GWFS
at that date.
On December 31, 1996, Great Western transferred to the Company a portion of
its consumer banking business, hereinafter referred to as Blazer Financial
Corporation ("BFC"). BFC was comprised primarily of approximately $229 million
in net consumer finance receivables and $147 million in customer deposits. The
Company recorded, at the purchase date, a transfer to Great Western of
approximately $35 million, representing the accumulated earnings of BFC at that
time.
Both of the above-described acquisitions have been accounted for in a
manner similar to a pooling of interests. Accordingly, the assets acquired and
liabilities assumed have been recorded at historical cost and prior period
financial statements of the Company have been restated for the acquisitions.
Eliminations have been made for material intercompany transactions between the
combined entities.
INCOME STATEMENT DATA
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------ -------------------
1995 1996 1997 1997 1998
---- ---- ---- ---- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Loan interest and fee income.......................... $363,448 $370,314 $369,600 $ 91,204 $ 98,448
Investment securities income.......................... 8,801 9,183 10,373 2,453 2,855
-------- -------- -------- -------- --------
Total interest income............................... 372,249 379,497 379,973 93,657 101,303
Interest and debt expense............................. 114,917 120,758 128,887 31,829 33,160
-------- -------- -------- -------- --------
Net interest income before provision for credit
losses.............................................. 257,332 258,739 251,086 61,828 68,143
Provision for credit losses........................... 48,500 58,800 66,600 15,400 18,000
-------- -------- -------- -------- --------
Net interest income................................. 208,832 199,939 184,486 46,428 50,143
Other operating income
Net insurance operations and other income........... 29,235 27,205 26,555 6,066 6,489
Other expenses
Personnel expenses.................................. 67,938 71,724 69,468 18,253 19,059
Other operating expenses............................ 62,387 55,902(1) 65,542 16,216 16,884
-------- -------- -------- -------- --------
130,325 127,626 135,010 34,469 35,943
-------- -------- -------- -------- --------
Income before income taxes............................ 107,742 99,518 76,031 18,025 20,689
Provision for federal and state income taxes(2)....... 42,445 37,000 29,744 7,100 8,200
-------- -------- -------- -------- --------
Net income............................................ $ 65,297 $ 62,518 $ 46,287 $ 10,925 $ 12,489
======== ======== ======== ======== ========
Ratio of earnings to fixed charges(3)................. 1.91 1.80 1.57 1.55 1.61
</TABLE>
- ---------------
(1) In May 1996, the Company filed a fidelity bond claim in the amount of $8.0
million for the recovery of fraudulently over-billed marketing costs which
had occurred over a number of years. The $8.0 million recovery has been
reflected as a reduction of other operating expenses.
(2) The Company is included in the consolidated Federal income tax return filed
by Washington Mutual. Currently payable Federal income taxes will be paid to
Washington Mutual. Federal income taxes are allocated between Washington
Mutual and its subsidiaries in proportion to the respective contribution to
consolidated income or loss. Allocations for state income taxes approximate
the amount the Company would have paid on a separate entity basis. Deferred
income taxes are provided on elements of income or expense that are
recognized in different periods for financial and tax reporting purposes.
(3) The ratio of earnings to fixed charges is calculated as described in the
accompanying Prospectus under the caption "Ratio of Earnings to Fixed
Charges."
S-4
<PAGE> 5
BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1996 1997 1998
------------ ------------ ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Finance receivables, net................................. $2,115,858 $2,235,080 $2,197,197
Investment securities.................................... 137,072 154,475 156,270
Cash and cash equivalents................................ 22,660 26,446 29,387
Other assets............................................. 116,268 118,027 119,189
---------- ---------- ----------
Total assets.................................... $2,391,858 $2,534,028 $2,502,043
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Short-term debt........................................ $ 398,006 $ 357,532 $ 295,402
Long-term debt......................................... 1,352,770 1,472,872 1,483,023
---------- ---------- ----------
Total debt...................................... 1,750,776 1,830,404 1,778,425
Customer deposits...................................... 146,138 163,185 165,697
Accounts payable and other liabilities................. 46,366 47,209 46,280
Federal and state income taxes......................... 13,836 24,628 32,726
Insurance claims and benefits reserves................. 7,702 7,824 8,024
Unearned insurance premiums and commissions............ 57,800 62,594 64,420
---------- ---------- ----------
Total liabilities............................... 2,022,618 2,135,844 2,095,572
Total stockholder's equity............................... 369,240 398,184 406,471
---------- ---------- ----------
Total liabilities and stockholder's equity...... $2,391,858 $2,534,028 $2,502,043
========== ========== ==========
</TABLE>
S-5
<PAGE> 6
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement, the Company has agreed to sell to each of the
Underwriters named below, and each of such Underwriters has severally agreed to
purchase, the principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF NOTES
----------- -------------
<S> <C>
Chase Securities Inc. ...................................... $ 40,000,000
Bear, Stearns & Co. Inc. ................................... 40,000,000
Deutsche Bank Securities Inc. .............................. 40,000,000
Lehman Brothers Inc. ....................................... 40,000,000
Nesbitt Burns Inc. ......................................... 40,000,000
------------
Total.................................................. $200,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the
Pricing Agreement, the Underwriters are committed to take and pay for all of the
Notes, if any are taken.
The Underwriters propose to offer the Notes in part directly to the public
at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.20% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
0.125% of the principal amount of the Notes to certain brokers and dealers.
After the Notes are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Underwriters.
In connection with the offering of the Notes, Chase Securities Inc., on
behalf of the Underwriters, may engage in overallotment, stabilizing
transactions and syndicate covering transactions in accordance with Regulation M
under the Exchange Act. Overallotment involves sales in excess of the offering
size, which creates a short position for the Underwriters. Stabilizing
transactions involve bids to purchase the Notes in the open market for the
purpose of pegging, fixing or maintaining the price of the Notes. Syndicate
covering transactions involve purchases of the Notes in the open market after
the distribution has been completed in order to cover short positions. Such
stabilizing transactions and syndicate covering transactions may cause the price
of the Notes to be higher than it would otherwise be in the absence of such
transactions. Such activities, if commenced, may be discontinued at any time.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market in the Notes but are 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 several Underwriters against
certain liabilities, including certain liabilities under the Securities Act.
Each of the Underwriters or its affiliates has provided, and may in the
future provide, certain general financing and banking services to the Company
and its affiliates. Affiliates of Chase Securities Inc., Deutsche Bank
Securities Inc. and Nesbitt Burns Inc. are lenders under the Company's revolving
credit agreement.
S-6
<PAGE> 7
LEGAL OPINIONS
The legality of the Notes will be passed upon for the Company by Foster
Pepper & Shefelman PLLC, Seattle, Washington. Certain legal matters in
connection with the Notes will be passed upon for the Underwriters by Simpson
Thacher & Bartlett, New York, New York. As of July 22, 1998, individual members
of Foster Pepper & Shefelman PLLC owned an aggregate of 28,084 shares of the
common stock of Washington Mutual, the ultimate parent of the Company.
EXPERTS
The financial statements of the Company as of December 31, 1997 and 1996,
and for each of the years in the three-year period ended December 31, 1997, have
been incorporated in this Prospectus by reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 in reliance upon the report of
Deloitte & Touche LLP, independent auditors, as of and for the year ended
December 31, 1997, and the report of Price Waterhouse LLP, independent auditors,
as of and for the two-year period ended December 31, 1996, given on the
authority of those firms as experts in auditing and accounting.
S-7
<PAGE> 8
PROSPECTUS
$850,000,000
ARISTAR LOGO
DEBT SECURITIES
------------------------
Aristar, Inc. (the "Company") may offer from time to time up to
$850,000,000 aggregate principal amount of its debt securities (the "Debt
Securities"). The Debt Securities may be senior Debt Securities (the "Senior
Debt Securities") or subordinated Debt Securities (the "Subordinated Debt
Securities"). The Debt Securities will be offered in one or more separate series
in amounts, at prices and on terms to be determined at the time of offering. See
"Plan of Distribution."
The Debt Securities may be issued in registered form without coupons or in
bearer form with or without coupons. In addition, all or a portion of the Debt
Securities may be issued in temporary or definitive global form. Debt Securities
which are Book-Entry Securities (as defined herein) will be issued in global
registered form. Debt Securities in bearer form are subject to United States tax
law requirements, and, subject to certain exceptions, may not be offered, sold
or delivered within the United States or to United States persons (each as
defined herein).
The specific designation, aggregate principal amount, authorized
denominations, maturity, rate (or method of determining the same) and time of
payment of interest, if any, any redemption or repurchase terms, any listing on
a securities exchange, the initial public offering price, the names of, and the
principal amounts to be purchased by or through, underwriters, dealers or
agents, if any, the compensation of such persons and other special terms in
connection with the offering and sale of the series of Debt Securities in
respect of which this Prospectus is being delivered (the "Offered Securities")
are set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement").
The Senior Debt Securities, when issued, will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. The Subordinated
Debt Securities, when issued, will be unsecured and subordinated to all present
and future Senior Debt (as defined herein) of the Company, will rank on a parity
with all other Subordinated Debt (as defined herein) of the Company, and will be
senior to the Company's common stock.
------------------------
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.
------------------------
June 23, 1997
<PAGE> 9
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN, OR INCORPORATED BY REFERENCE IN, THIS PROSPECTUS
OR THE PROSPECTUS SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY AGENT, UNDERWRITER OR DEALER. THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE DEBT SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY
OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT
THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THEIR RESPECTIVE DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission at 500 West Madison Street, 14th Floor, Chicago, Illinois 60661, and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants, like the Company, that
file electronically with the Commission at the following address:
http://www.sec.gov. Certain debt securities of the Company are listed on the New
York Stock Exchange, and reports and other information concerning the Company
can be inspected at the offices of such exchange at 20 Broad Street, New York,
New York 10005. This Prospectus does not contain all of the information set
forth in the Registration Statement on Form S-3 and the exhibits thereto which
the Company has filed with the Commission under the Securities Act of 1933, as
amended, and to which reference is hereby made for further information.
Each of the Indentures (as defined herein) pursuant to which the Debt
Securities are being issued requires the Company to file reports under the 1934
Act. Quarterly and annual reports will be made available upon request of holders
of the Debt Securities, which annual reports will contain financial information
that has been examined and reported upon by, with an opinion expressed by, an
independent public or certified public accountant.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by the Company
with the Commission pursuant to the 1934 Act (File No. 1-3521), are incorporated
by reference in this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997; and
(3) The Company's Current Report on Form 8-K dated December 31, 1996
(filed on January 13, 1997), as amended by the Company's Current
Report on Form 8-K/A (filed on March 14, 1997).
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this Prospectus
and the accompanying Prospectus Supplement shall be deemed to be incorporated
herein by reference and shall be deemed to be a part hereof from the date of
filing of such documents (such documents, and the documents enumerated above,
being herein referred to as "Incorporated Documents"; provided, however, that
the documents enumerated above and documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
filing with the Commission of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 shall not be Incorporated Documents or
2
<PAGE> 10
be incorporated by reference in this Prospectus or be a part hereof from and
after the filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for all purposes to the extent that a statement contained
herein or in any other subsequently filed Incorporated Document or in an
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the Incorporated Documents, other than exhibits to such documents. Requests
for such copies should be directed to Aristar, Inc., Office of the Chief
Financial Officer, 8900 Grand Oak Circle, Tampa, Florida 33637-1050, telephone
number: (813) 632-4500.
THE COMPANY
The Company, incorporated in Delaware in 1986 as a successor to a company
incorporated in 1927, is a holding company headquartered in Tampa, Florida whose
subsidiaries are engaged in the consumer financial services business. All of the
Company's equity securities are owned indirectly by Great Western Financial
Corporation ("Great Western"). Great Western is the parent of a group of
companies engaged primarily in mortgage lending, retail banking and consumer
financial services. On March 6, 1997, Great Western and Washington Mutual, Inc.
("Washington Mutual"), a financial services company, announced that they had
entered into an Agreement and Plan of Merger providing for the merger of Great
Western with and into a wholly-owned subsidiary of Washington Mutual (the
"Merger"). Subject to the satisfaction or waiver of certain conditions,
including the receipt of necessary shareholder and regulatory approvals, it is
anticipated that the Merger would be consummated in the third quarter of 1997.
Following the Merger, the Company would be an indirect subsidiary of Washington
Mutual.
The operations of the Company consist principally of a network of
approximately 500 branch offices located in 23 states, primarily in the
southeastern United States and in California. These offices generally operate
under the names Blazer Financial Services, City Finance Company and First
Community Financial Services.
The Company makes direct consumer installment loans and purchases retail
installment contracts from local retail establishments. These consumer credit
transactions are primarily for personal, family or household purposes. The
Company also engages in the industrial banking business through subsidiaries in
Colorado and Utah. In addition to making direct consumer installments loans and
purchasing retail installment contracts, these subsidiaries also take customers'
savings deposits. Installment loans written in 1996 had original terms ranging
from 12 to 360 months and averaged 72 months. For the year ended December 31,
1996, 59% of the volume of all installment loans was either unsecured or secured
by guarantors, luxury consumer goods, automobiles or other personal property,
with the remaining 41% being secured by real estate. Retail installment
contracts are generally acquired without recourse to the originating merchant.
These contracts are typically written with original terms from 3 to 60 months
and for 1996 had an average original term of 26 months. The Company calculates
delinquencies on its consumer finance portfolio as the percentage of the gross
amount of accounts which are 60 days or more past due based on the accounts'
original contractual terms. At December 31, 1996, such contractual delinquencies
amounted to 2.5% of gross receivables outstanding.
The principal executive offices of the Company are located at 8900 Grand
Oak Circle, Tampa, Florida 33637-1050. Its telephone number is (813) 632-4500.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the net proceeds
available to the Company from the sale of the Debt Securities will be used to
reduce borrowings of the Company (including outstanding commercial paper) and
for general corporate purposes.
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<PAGE> 11
The precise amount and timing of sales of the Debt Securities will be
dependent on market conditions and the availability and cost of other funds to
the Company. The Company expects that additional long-term and short-term
financing will be required from time to time. Such financing may be effected
through such means as the Company deems appropriate at the time. The amount and
timing of further financing cannot now be determined.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the periods indicated. Earnings consist of income from
continuing operations before income taxes and, in 1992, before the cumulative
effect of a change in accounting principle, plus fixed charges. Fixed charges
consist of interest and debt expense and an appropriate portion of rentals.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
- ---------------------------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.83 1.90 1.96 1.91 1.80 1.79 1.55
</TABLE>
DESCRIPTION OF DEBT SECURITIES
Senior Debt Securities may be issued from time to time under an Indenture
dated as of October 1, 1997 (the "Senior Indenture") between the Company and
First Union National Bank, as Trustee (the "Senior Trustee"). Subordinated Debt
Securities may be issued from time to time under an Indenture dated as of
October 1, 1997 (the "Subordinated Indenture") between the Company and First
Union National Bank, as Trustee (the "Subordinated Trustee"). The Senior
Indenture and the Subordinated Indenture are sometimes referred to collectively
as the "Indentures" and individually as an "Indenture". The Senior Trustee and
the Subordinated Trustee are sometimes referred to collectively as the
"Trustees" and individually as a "Trustee". The forms of the Indentures are
filed as exhibits to the Registration Statement. Each of the Indentures
incorporates the Company's Standard Multiple-Series Indenture Provisions (the
"Standard Provisions") the form of which is also filed as an exhibit to the
Registration Statement. The following are brief summaries of certain provisions
of each Indenture and are subject to the detailed provisions of such Indenture,
to which reference is hereby made for a complete statement of such provisions.
Capitalized terms used herein and not otherwise defined are used with the
meanings ascribed thereto in the Standard Provisions.
GENERAL
Each Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured general obligations of the Company.
Neither Great Western, the Company's ultimate parent, nor any of Great
Western's other subsidiaries have (i) any obligation, direct or otherwise, with
respect to the Debt Securities, (ii) any obligation to maintain the net worth of
the Company or (iii) any agreement with respect to the continuation of the
present ownership of the Company.
The Debt Securities may be issued in fully registered form without coupons
("Registered Securities") or in bearer form with or without coupons ("Bearer
Securities") or in the form of one or more global securities (each a "Global
Security"). Registered Securities which are book-entry securities ("Book-Entry
Securities") will be issued as registered Global Securities. Bearer Securities
may be issued in the form of temporary or definitive Global Securities. Unless
otherwise provided in the Prospectus Supplement, the Debt Securities will be
only Registered Securities. The Debt Securities will be issued, unless otherwise
provided in the Prospectus Supplement, in denominations of $1,000 or an integral
multiple thereof for Registered Securities, and in denominations of $5,000 or an
integral multiple thereof for Bearer Securities.
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<PAGE> 12
The Prospectus Supplement describes the following terms of the Offered
Securities: (1) the title of the Offered Securities; (2) whether the Offered
Securities are Senior Debt Securities or Subordinated Debt Securities; (3) the
percentage of principal amount at which the Offered Securities will be issued;
(4) any limit on the aggregate principal amount of the Offered Securities; (5)
the date or dates on which the Offered Securities will mature and the amount or
amounts of any installment of principal payable on such dates; (6) the rate or
rates (which may be fixed or variable) per annum at which the Offered Securities
will bear interest, if any, or the method of determining such rate or rates and
the date or dates from which such interest, if any, will accrue; (7) the date or
dates on which interest, if any, on the Offered Securities will be payable and
the regular record dates for such payment dates; (8) the terms for redemption,
repurchase or early payment, if any, including any mandatory or optional sinking
fund or analogous provisions; (9) the principal amount of Offered Securities
which bear no interest or interest at a rate which at the time of issuance is
below market rates that is payable upon declaration of acceleration of the
maturity of the Offered Securities; (10) whether the Offered Securities will be
issued in registered form without coupons, in bearer form with or without
coupons, including temporary and definitive global form, or a combination
thereof and the circumstances, if any, upon which such Offered Securities may be
exchanged for Offered Securities issued in a different form; (11) whether the
Offered Securities are to be issued in whole or in part in the form of one or
more Global Securities and, if so, the identity of the depositary for such
Global Security or Securities; (12) whether and under what circumstances the
Company will pay additional amounts to any Holder of Offered Securities who is
not a United States person (as defined under "-- Limitations on Issuance of
Bearer Securities") in respect of any tax, assessment or other governmental
charge required to be withheld or deducted and, if so, whether the Company will
have the option to redeem rather than pay any additional amounts; (13) any
additional covenants for the benefit of the holders of the Offered Securities;
and (14) certain other terms, including the ability of the Company to satisfy
and discharge its obligations under the Indenture with respect to the Offered
Securities.
No service charge will be made for any transfer or exchange of the Debt
Securities but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Debt Securities of a single series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, may be issued at or above par or with an original
issue discount, and may otherwise vary, all as provided in the Indentures.
Federal income tax consequences and other special considerations applicable
to any Debt Securities issued with original issue discount or above par will be
described in the Prospectus Supplement relating thereto.
STATUS OF SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured and unsubordinated general
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Payment of the principal of (and premium, if any) and interest, if any, on
the Subordinated Debt Securities will be subordinate and junior in right of
payment to the prior payment in full of all Senior Debt (as defined herein). At
April 30, 1997, Senior Debt aggregated approximately $1,658,000,000. The
Subordinated Indenture does not limit or restrict the Company's ability to incur
additional Senior Debt, but certain other debt instruments of the Company
contain such limitations.
In the event of any sale pursuant to any judgment or decree in any
proceeding by or on behalf of any Holder, or of any distribution, division or
application of all or any part of the assets of the Company to its creditors by
reason of any liquidation, dissolution or winding up of the Company or
5
<PAGE> 13
any receivership, insolvency, bankruptcy or similar proceeding relative to the
Company or its debts or properties, then the holders of Senior Debt shall be
preferred in the payment of their claims over the holders of the Subordinated
Debt Securities, and such Senior Debt shall be satisfied in full before any
payment or other distribution (other than securities which are subordinate and
junior in right of payment to the payment of all Senior Debt then outstanding)
shall be made upon the Subordinated Debt Securities. In the event that any
Subordinated Debt Security is declared or becomes due and payable before its
maturity because of an occurrence of an event of default (under circumstances
not described in the preceding sentence), no amount shall be paid in respect of
the Subordinated Debt Securities in excess of current interest payments, except
sinking fund payments or at maturity, unless all Senior Debt then outstanding
shall have been paid in full or payments satisfactory to the holders thereof
provided therefor. During the continuance of any default on Senior Debt, no
payments of principal, sinking fund, interest or premium shall be made with
respect to any Subordinated Debt Security if either (i) notice of default has
been given to the Company, provided judicial proceedings are commenced in
respect thereof within 120 days, or (ii) judicial proceedings shall be pending
in respect of such default. In the event that any Subordinated Debt Security is
declared or becomes due and payable before maturity, each holder of Senior Debt
shall be entitled to notice of same and shall be entitled to declare payable on
demand any Senior Debt outstanding to such holder.
"Debt" is defined in the Subordinated Indenture to include all indebtedness
of the Company or any Consolidated Subsidiary representing money borrowed,
except indebtedness owed to the Company by any Consolidated Subsidiary or owed
to any Consolidated Subsidiary by the Company or any other Consolidated
Subsidiary, and includes indebtedness of any other person for money borrowed
when such indebtedness is guaranteed by the Company or any Consolidated
Subsidiary. The term "Debt" shall be deemed to include the liability of the
Company or any Consolidated Subsidiary in respect of any investment or similar
certificate, except to the extent such certificates are pledged by purchasers as
collateral for, and are offset by, receivables. "Senior Debt" is defined to mean
all Debt except Subordinated Debt. "Subordinated Debt" is defined to mean the
Company's 8.875% Senior Subordinated Notes Due 1998, the Company's 7 1/2% Senior
Subordinated Notes Due 1999 and any other Debt which is subordinate and junior
in right of payment to any other Debt by the terms of the instrument creating or
evidencing such Subordinated Debt.
Subordinated Debt Securities will rank on a parity with all other
Subordinated Debt. Subordinated Debt Securities are senior to the Company's
common stock and will be senior to any other class of capital stock which may be
authorized.
EXCHANGE, REGISTRATION AND TRANSFER
Registered Securities (other than Book-Entry Securities) of any series will
be exchangeable for other Registered Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations. In
addition, if Debt Securities of any series are issuable as both Registered
Securities and Bearer Securities, at the option of the Holder and subject to the
terms of the Indenture, Bearer Securities (with all unmatured coupons, except as
provided below, and all matured coupons in default) of such series will be
exchangeable into Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Bearer
Securities with coupons appertaining thereto surrendered in exchange for
Registered Securities between a Regular Record Date or a Special Record Date and
the relevant date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest and interest due on such
date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than Book-Entry Securities) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of
6
<PAGE> 14
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in the Prospectus Supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. Such transfer or exchange will
be effected upon the Security Registrar or such transfer agent, as the case may
be, being satisfied with the documents of title and identity of the person
making the request. The Company has appointed the Trustee under each Indenture
as Security Registrar. If a Prospectus Supplement refers to any transfer agents
(in addition to the Security Registrar) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if Debt Securities of a
series are issuable solely as Registered Securities, the Company will be
required to maintain a transfer agent in each Place of Payment for such series
and, if Debt Securities of a series are issuable as Bearer Securities, the
Company will be required to maintain (in addition to the Security Registrar) a
transfer agent in a Place of Payment for such series located in Europe. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities.
In the event of any redemption in part, the Company shall not be required
to: (i) issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on (a) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (b) if Debt Securities of the series are issuable only as Bearer Securities,
the day of the first publication of the relevant notice of redemption or, if
Debt Securities of the series are also issuable as Registered Securities and
there is no publication, the day of mailing of the relevant notice of
redemption; (ii) register the transfer of or exchange any Registered Security,
or portion thereof, called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; or (iii) exchange any Bearer
Security called for redemption, except to exchange such Bearer Security for a
Registered Security of that series and like tenor which is simultaneously
surrendered for redemption.
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities, see "-- Global Securities".
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the Prospectus Supplement, payment of
principal of (and premium, if any) and interest, if any, on Bearer Securities
will be payable in U.S. dollars, subject to any applicable laws and regulations,
at the offices of such Paying Agents outside the United States as the Company
may designate from time to time, and payment of interest on Bearer Securities
with coupons appertaining thereto on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date. No
payment of interest on a Bearer Security will be made unless, on the earlier of
the date of the first such payment by the Company or the delivery by the Company
of the Bearer Security in definitive form, a written certificate in the form
required by the Indenture is provided to the Trustee stating that on such date
the Bearer Security is owned by (i) a person that is not a United States person,
(ii) a United States person that (a) is a foreign branch of a United States
financial institution purchasing for its own account or for resale or (b)
acquired and holds the Bearer Security through the foreign branch of a United
States financial institution (and, in the case of either (a) or (b), such
financial institution agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder) or (iii) a financial institution
purchasing for resale during the restricted period (as defined under "-- Global
Securities -- Temporary and Definitive Global Securities") and, in any case, if
any such owner is a financial institution, such financial institution has not
acquired the Bearer Security for purposes of resale to United States persons or
to persons within the United States (as defined under "-- Limitations on
Issuance of Bearer Securities"). Presentation of coupons for payment or other
demands for payment of Bearer Securities must be made outside the United States,
and no payment with respect to any Bearer Security will be made at any office or
agency of the Company in the United States or by check mailed
7
<PAGE> 15
to any address in the United States or by transfer to an account maintained with
a bank located in the United States. Notwithstanding the foregoing, payments of
principal of (and premium, if any) and interest, if any, on Bearer Securities
will be made at the office of the Company's Paying Agent in The City of New
York, if (but only if) (i) despite the appointment of Paying Agents outside the
United States, payment of the full amount thereof at the offices of all such
Paying Agents is illegal or effectively precluded by exchange controls or other
similar restrictions, (ii) such payment is then permitted by applicable laws and
(iii) in appointing a Paying Agent in The City of New York, the Company would
not suffer any fiscal or other sanction under applicable laws as a result of
such appointment or of any payment being made through such Paying Agent.
Unless otherwise provided in the Prospectus Supplement, payment of
principal of (and premium, if any) and interest, if any, on Registered
Securities will be made in U.S. dollars at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register. Unless otherwise provided in the Prospectus Supplement,
payment of any installment of interest on Registered Securities will be made to
the Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest.
Unless otherwise provided in the Prospectus Supplement, the Corporate Trust
Office of each Trustee in The City of New York will be designated as the
Company's sole Paying Agent for payments with respect to Offered Securities that
are issuable solely as Registered Securities and as the Company's Paying Agent
in The City of New York for payments with respect to Offered Securities (subject
to the limitations described above in the case of Bearer Securities) that are
issuable solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Offered
Securities will be named in the Prospectus Supplement. The Company may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Debt Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in The City of New York for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer Securities of
the series in the circumstances described above, but not otherwise), and (ii) a
Paying Agent in a Place of Payment located outside the United States where Debt
Securities of such series and any coupons appertaining thereto may be presented
and surrendered for payment; provided that if the Debt Securities of such series
are listed on The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent in London or Luxembourg or any
other required city located outside the United States, as the case may be, for
the Debt Securities of such series.
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) or interest, if any, on any Debt Security or
coupon that remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to the
Company and the Holder of such Debt Security or coupon will thereafter look only
to the Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part as one or
more Global Securities that will be deposited with, or on behalf of, a
depositary located in the United States (a "U.S. Depositary") or a common
depositary located outside the United States (a "Common Depositary") identified
in the Prospectus Supplement relating to such series. Global Securities may be
issued in either registered or bearer form, and in either temporary or
definitive form.
8
<PAGE> 16
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will apply
to all depositary arrangements with a U.S. Depositary or Common Depositary.
Book-Entry Securities
Unless otherwise specified in the Prospectus Supplement, Debt Securities
which are to be represented by a Global Security to be deposited with or on
behalf of a U.S. Depositary will be represented by a Global Security registered
in the name of such depositary or its nominee. Upon the issuance of a Global
Security in registered form, the U.S. Depositary for such Global Security 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 institutions that have accounts with such depositary or its
nominee ("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Securities will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
in such Global Securities will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the U.S. Depositary or its
nominee for such Global Security or by participants or persons that hold through
participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the U.S. Depositary for a Global Security in registered form, or
its nominee, is the registered owner of such Global Security, such 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 governing such Debt Securities. Except as set forth below, owners
of beneficial interests in such Global Securities will not be entitled to have
Debt Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture including, without limitation, for
purposes of consenting to any amendment thereof or supplement thereto.
Payment of principal of (and premium, if any) and interest, if any, on Debt
Securities registered in the name of or held by a U.S. Depositary or its nominee
will be made to the U.S. Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Security representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent or the Security
Registrar 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 a Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the U.S. Depositary for Debt Securities of a
series, upon receipt of any payment of principal of (and premium, if any) or
interest on permanent Global Securities, will credit participants' accounts on
the date such payment is payable in accordance with their respective beneficial
interests in the principal amount of such Global Securities as shown on the
records of such Depositary. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such participants.
Unless and until it is exchanged in whole for Debt Securities in definitive
form, a Global Security may not be transferred except as a whole by the U.S.
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another
9
<PAGE> 17
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor. If a U.S.
Depositary for Debt Securities in registered form is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within ninety days, the Company will issue Debt Securities in
definitive registered form in exchange for the Global Security or Securities
representing such Debt Securities. In addition, the Company may at any time and
in its sole discretion determine not to have any Debt Securities in registered
form represented by one or more Global Securities and, in such event, will issue
Debt Securities in definitive registered form in exchange for the Global
Security or Securities representing such Debt Securities. In any such instance,
an owner of a beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of Debt Securities of the series
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debt Securities registered in the name of the owner of
such beneficial interest.
Temporary and Definitive Global Securities
If so specified in the Prospectus Supplement, all or any portion of the
Debt Securities of a series that are issuable as Bearer Securities initially
will be represented by one or more temporary Global Securities, without interest
coupons, to be deposited with a Common Depositary in London for Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euro-clear System
("Euro-clear") and CEDEL S.A. ("CEDEL") for credit to the respective accounts of
the beneficial owners of such Debt Securities (or to such other accounts as they
may direct). On and after the exchange date determined as provided in any such
temporary Global Security and described in the Prospectus Supplement, each such
temporary Global Security will be exchangeable for definitive Debt Securities in
bearer form, registered form, definitive global bearer form or any combination
thereof, as specified in the Prospectus Supplement, upon written certification
(as described under "-- Payment and Paying Agents") of non-United States
beneficial ownership. No Bearer Security delivered in exchange for a portion of
a temporary Global Security shall be mailed or otherwise delivered to any
location in the United States.
Unless otherwise provided in the Prospectus Supplement, interest in respect
of any portion of a temporary Global Security payable in respect of an Interest
Payment Date occurring prior to the issuance of definitive Debt Securities will
be paid to each of Euro-clear and CEDEL with respect to the portion of the
temporary Global Security held for its account upon delivery to the Trustee of a
certificate of non-United States beneficial ownership signed by Euro-clear or
CEDEL, as the case may be, in the form required by the applicable Indenture
dated no earlier than such Interest Payment Date.
If any Debt Securities of a series are issuable in definitive global bearer
form, the Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such definitive Global Security may
exchange such interests for Debt Securities of such series and of like tenor and
principal amount in any authorized form and denomination. No Bearer Security
delivered in exchange for a portion of a definitive Global Security shall be
mailed or otherwise delivered to any location in the United States in connection
with such exchange. A Person having a beneficial interest in a definitive Global
Security, except with respect to payment of principal of (and premium, if any)
and interest, if any, on such definitive Global Security, will be treated as a
Holder of such principal amount of Outstanding Debt Securities represented by
such definitive Global Security as shall be specified in a written statement of
the Holder of such definitive Global Security or, in the case of a definitive
Global Security in bearer form, of Euro-clear or CEDEL which is produced to the
Trustee by such Person. Principal of (and premium, if any) and interest, if any,
on a definitive Global Security will be payable in the manner described in the
Prospectus Supplement.
In connection with the sale of a Bearer Security during the "restricted
period," as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States
Treasury regulations (generally, the first 40 days after the closing date and,
with respect to unsold allotments, until sold), no Bearer Security (including a
definitive Bearer Security in global form) shall be mailed or otherwise
delivered to any location in the United States and a Bearer Security sold during
the restricted period may be
10
<PAGE> 18
delivered only if the person entitled to receive such Bearer Security (including
a definitive Bearer Security in global form) furnishes written certification (as
described under "-- Payment and Paying Agents") of non-United States beneficial
ownership. See "-- Limitations on Issuance of Bearer Securities".
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
Generally, in compliance with United States federal tax laws and
regulations, Bearer Securities may not be offered or sold during the restricted
period (as defined under "-- Global Securities -- Temporary and Definitive
Global Securities") or delivered in connection with their sale during the
restricted period in the United States or to United States persons (each as
defined below) other than foreign branches of United States financial
institutions that agree in writing to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code or that purchase for resale during the
restricted period only to non-United States persons outside the United States.
Any underwriters, agents and dealers participating in the offering of Debt
Securities must agree that they will not offer or sell any Bearer Securities in
the United States or to United States persons (other than the financial
institutions described above) or deliver Bearer Securities within the United
States.
Bearer Securities and their interest coupons will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code". The Code Sections referred to in the legend provide
that, with certain exceptions, a United States person holding a Bearer Security
or coupon will not be permitted to deduct any loss, and will not be eligible for
capital gain treatment with respect to any gain, realized on a sale, exchange or
redemption of such Bearer Security or coupon.
As used in this Prospectus, "United States person" means (i) an individual
citizen or resident of the United States, (ii) a corporation or partnership
organized in or under the laws of the United States or any state thereof or the
District of Columbia, (iii) an estate or trust the income of which is subject to
United States federal income taxation regardless of its source or (iv) a trust
the administration of which is subject to the primary supervision of a court
within the United States and for which one or more United States fiduciaries
have the authority to control all substantial decisions and the term "United
States" means the United States of America (including the States and the
District of Columbia), its territories, its possessions, the Commonwealth of
Puerto Rico and other areas subject to its jurisdiction.
ABSENCE OF RESTRICTIVE COVENANTS
The Company is not restricted by either of the Indentures from paying
dividends or from incurring, assuming or becoming liable for any type of debt or
other obligations or from creating liens on its property for any purpose.
Neither of the Indentures requires the maintenance of any financial ratios or
specified levels of net worth or liquidity. Neither of the Indentures contains
provisions which afford holders of the Debt Securities protection in the event
of a highly leveraged transaction involving the Company.
MERGER AND CONSOLIDATION
Each Indenture provides that the Company, without the consent of the
Holders of any of the Outstanding Debt Securities, may consolidate with or merge
into any other corporation or transfer or lease its properties and assets
substantially as an entirety to any Person or may permit any corporation to
merge into the Company, provided that: (i) the successor is a corporation
organized under the laws of any domestic jurisdiction; (ii) the successor, if
other than the Company, assumes the Company's obligations under such Indenture
and the Debt Securities issued thereunder; (iii) 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, shall have occurred and
be continuing; and (iv) certain other conditions are met.
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Each Indenture provides that, upon any consolidation or merger or transfer
or lease of the properties and assets of the Company substantially as an
entirety in accordance with the preceding paragraph, the successor corporation
formed by such consolidation or into which the Company is merged or to which
such transfer or lease is made shall be substituted for the Company with the
same effect as if such successor corporation had been named as the Company.
Thereafter, the Company shall be relieved of the performance and observance of
all obligations and covenants of such Indenture and the Senior Debt Securities
or Subordinated Debt Securities, as the case may be, including but not limited
to the obligation to make payment of the principal of (and premium, if any) and
interest, if any, on all the Debt Securities then outstanding, and the Company
may thereupon or any time thereafter be liquidated and dissolved.
SATISFACTION AND DISCHARGE
Unless the Prospectus Supplement provides otherwise, the Company will be
discharged from its obligations under the Outstanding Debt Securities of a
series upon satisfaction of the following conditions: (a) the Company has
irrevocably deposited with the Trustee either (i) money in an amount as will, or
(ii) U.S. Government Obligations as will, together with the predetermined and
certain income to accrue thereon without consideration of any reinvestment
thereof, or (iii) a combination of (i) and (ii) as will (in a written opinion
with respect to (ii) or (iii) of independent public accountants delivered to the
Trustee), be sufficient to pay and discharge the entire principal of (and
premium, if any), and interest, if any, to Stated Maturity or any redemption
date on, the Outstanding Debt Securities of such series; (b) the Company has
paid or caused to be paid all other sums payable with respect to the Outstanding
Debt Securities of such series; (c) the Trustee has received an Officers'
Certificate and an Opinion of Counsel each stating that all conditions precedent
have been complied with; and (d) the Trustee has received (i) a ruling directed
to the Company and the Trustee from the United States Internal Revenue Service
to the effect that the Holders of the Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
the Company's exercise of its option to discharge its obligations under the
Indenture with respect to such series 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 such deposit and discharge had not occurred or (ii) an opinion
of tax counsel to the same effect as the ruling described in clause (i) above
and based upon a change in law. Upon such discharge, the Company will be deemed
to have satisfied all the obligations under the Indenture, except for
obligations with respect to registration of transfer and exchange of the Debt
Securities of such series, and the rights of the Holders to receive from
deposited funds payment of the principal of (and premium, if any) and interest,
if any, on the Debt Securities of such series.
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee thereunder may,
without the consent of any Holders of Debt Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding any additional Events of Default, establishing the form or
terms of Debt Securities or curing ambiguities or inconsistencies in such
Indenture or making other provisions; provided such action shall not adversely
affect the interests of the Holders of any series of Debt Securities in any
material respect.
Each Indenture contains provisions permitting the Company, with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of all affected series (acting as one class), to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of such Indenture or modifying the rights of
the Holders of the Debt Securities of such series, except that no such
supplemental indenture may, without the consent of the Holders of all the
Outstanding Debt Securities affected thereby, among other things: (i) change the
maturity of the principal of, or any installment of principal of or interest on,
any of the Debt Securities; (ii) reduce the principal amount thereof (or any
premium thereon) or the rate of interest, if any, thereon; (iii) reduce the
amount of the principal of Original Issue Discount Securities payable
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<PAGE> 20
on any acceleration of maturity; (iv) change any obligation of the Company to
maintain an office or agency in the places and for the purposes required by such
Indenture; (v) impair the right to institute suit for the enforcement of any
such payment on or after the applicable maturity date; (vi) reduce the
percentage in principal amount of the Outstanding Debt Securities of any series,
the consent of the Holders of which is required for any such supplemental
indenture or for any waiver of compliance with certain provisions of, or of
certain defaults under, such Indenture; or (vii) with certain exceptions, to
modify the provisions for the waiver of certain defaults and any of the
foregoing provisions.
EVENTS OF DEFAULT
An Event of Default in respect of any series of Debt Securities (unless it
is either inapplicable to a particular series or has been modified or deleted
with respect to any particular series) is defined in each Indenture to be: (i) a
default for 30 days in the payment when due of any interest on such series of
Debt Securities; (ii) a default in the payment of principal of (and premium, if
any, on) such series of Debt Securities, whether payable at maturity, by call
for redemption, pursuant to any sinking fund or otherwise; (iii) a default for
90 days after a notice of default with respect to the performance of any other
covenant in such Indenture (other than a covenant included in such Indenture
solely for the benefit of a series of Debt Securities other than that series);
(iv) certain events of bankruptcy, insolvency or reorganization; (v) an event of
default under any mortgage, indenture (including such Indenture) or other
instrument under which any Debt shall be outstanding which default shall have
resulted in the acceleration of such Debt in excess of $25,000,000 in aggregate
principal amount (except that such amount shall be $20,000,000 in respect of a
default on Debt Securities of another series) and such acceleration shall not
have been rescinded or such Debt discharged within a period of 30 days after
notice; and (vi) any other event of default provided for such series of Debt
Securities.
Each Indenture provides that if an Event of Default specified therein in
respect of any series of Outstanding Debt Securities issued under such Indenture
shall have happened and be continuing, either the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series may declare the principal (or, if such Debt Securities
are Original Issue Discount Securities, such portion of the principal amount as
may be specified by the terms of such Debt Securities) of all of the Outstanding
Debt Securities of such series to be immediately due and payable.
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee thereunder, or exercising any trust or power conferred on such
Trustee, with respect to the Debt Securities of such series; provided that (i)
such direction shall not be in conflict with any rule of law or with the
Indenture, (ii) the Trustee may take any other action deemed proper that is not
inconsistent with such direction and (iii) the Trustee shall not determine that
the action so directed would be unjustly prejudicial to the Holders of Debt
Securities of such series not taking part in such direction.
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series may on behalf
of the Holders of all of the Outstanding Debt Securities of such series waive
any past default under the applicable Indenture with respect to such series and
its consequences, except a default (i) in the payment of the principal of (or
premium, if any) or interest, if any, on any of the Debt Securities of such
series or (ii) in respect of a covenant or provision of such Indenture which,
under the terms of such Indenture, cannot be modified or amended without the
consent of the Holders of all of the Outstanding Debt Securities of such series
affected thereby.
Each Indenture contains provisions entitling the Trustee thereunder,
subject to the duty of such Trustee during an Event of Default in respect of any
series of Debt Securities to act with the required standard of care, to be
indemnified by the Holders of the Debt Securities of such series before
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<PAGE> 21
proceeding to exercise any right or power under such Indenture at the request of
the Holders of the Debt Securities of such series.
Each Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default in respect of any series of Debt Securities,
give to the Holders of the Debt Securities of such series notice of all uncured
and unwaived defaults known to it; provided, however, that, except in the case
of a default in the payment of the principal of (or premium, if any) or any
interest on, or any sinking fund installment with respect to, any of the Debt
Securities of such series, such Trustee will be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the Holders of the Debt Securities of such series; and
provided, further, that such notice shall not be given until at least 30 days
after the occurrence of an Event of Default regarding the performance of any
covenant of the Company under such Indenture other than for the payment of the
principal of (or premium, if any) or any interest on, or any sinking fund
installment with respect to, any of the Debt Securities of such series. The term
default for the purpose of this provision only means any event that is, or after
notice or lapse of time, or both, would become, an Event of Default with respect
to the Debt Securities of such series.
The Company will be required to furnish annually to each Trustee a
certificate as to compliance with all conditions and covenants under each of the
Indentures.
MEETINGS
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the Trustee under the
applicable Indenture, and also, upon request, by the Company or the Holders of
at least 10% in principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given in accordance with "-- Notices"
below. Persons entitled to vote a majority in principal amount of the
Outstanding Debt Securities of a series shall constitute a quorum at a meeting
of Holders of Debt Securities of such series, except that in the absence of a
quorum, a meeting called by the Company or the Trustee shall be adjourned for a
period of not less than 10 days, and in the absence of a quorum at any such
adjourned meeting, the meeting shall be further adjourned for a period of not
less than 10 days, at which further adjourned meeting persons entitled to vote
25% in aggregate principal amount of the Outstanding Debt Securities of such
series shall constitute a quorum. Except for any consent which must be given by
the Holder of each Outstanding Debt Security affected thereby, as described
above under "-- Modification of the Indentures", and subject to the provisions
described in the last sentence under this subheading, any resolution presented
at a meeting or adjourned meeting duly reconvened at which a quorum is present
may be adopted by the affirmative vote of the lesser of (i) the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series
and (ii) 66 2/3% in aggregate principal amount of Outstanding Debt Securities of
such series represented and voting at the meeting; provided, however, that any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of Outstanding Debt Securities of a series may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the lesser of (i) the Holders of such specified percentage
in principal amount of the Outstanding Debt Securities of that series and (ii) a
majority in principal amount of Outstanding Debt Securities of such series
represented and voting at the meeting. Any resolution passed or decision taken
at any meeting of Holders of Debt Securities of any series duly held in
accordance with the applicable Indenture will be binding on all Holders of Debt
Securities of that series and the related coupons. With respect to any consent,
waiver or other action which the applicable Indenture expressly provides may be
given by the Holders of a specified percentage of Outstanding Debt Securities of
all series affected thereby (acting as one class), only the principal amount of
Outstanding Debt Securities of any series represented at a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid and voting in
favor of
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<PAGE> 22
such action shall be counted for purposes of calculating the aggregate principal
amount of Outstanding Debt Securities of all series affected thereby favoring
such action.
NOTICES
Except as otherwise provided in each Indenture, notices to Holders of
Bearer Securities will be given by publication at least once in a daily
newspaper in The City of New York and London and in such other city or cities as
may be specified in such Bearer Securities and will be mailed to such Persons
whose names and addresses were previously filed with the Trustee under the
applicable Indenture, within the time prescribed for the giving of such notice.
Notices to Holders of Registered Securities will be given by mail to the
addresses of such Holders as they appear in the Security Register.
TITLE
Title to any Bearer Securities and any coupons appertaining thereto will
pass by delivery. The Company, the appropriate Trustee and any agent of the
Company or such Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon and the registered owner of any Registered Security
(including Registered Securities in global registered form) as the absolute
owner thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes.
REGARDING THE TRUSTEES
Senior Trustee
The Company has a credit facility with the Senior Trustee.
Subordinated Trustee
The Company has a credit facility with the Subordinated Trustee.
PLAN OF DISTRIBUTION
The Company may sell all or part of the Debt Securities to or through one
or more underwriters for public offering and sale by them, and also may sell
Debt Securities directly to investors or through one or more agents.
Any particular series of Debt Securities may be acquired by such
underwriter(s) 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. In
connection with the sale of Debt Securities, underwriters, dealers and agents
may receive compensation from the Company or from purchasers of Debt Securities
in the form of discounts, concessions or commissions. Underwriters, dealers and
agents who participate in the distribution of Debt Securities may be deemed to
be underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of Debt Securities by them may be deemed to
be underwriting discounts and commissions under the Securities Act of 1933, as
amended. Any such underwriter, dealer or agent will be identified, and any such
compensation received from the Company will be described, in the Prospectus
Supplement. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by the Company against certain liabilities,
including certain liabilities under the Securities Act of 1933, as amended.
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<PAGE> 23
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH THEY RELATE OR AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCE IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF OR
THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
-------------------------------------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
Recent Developments S-2
Use of Proceeds S-2
Description of Notes S-2
Summary Financial Information S-4
Underwriting S-6
Legal Opinions S-7
Experts S-7
PROSPECTUS
Available Information 2
Incorporation of Certain Documents by
Reference 2
The Company 3
Use of Proceeds 3
Ratio of Earnings to Fixed Charges 4
Description of Debt Securities 4
Plan of Distribution 15
</TABLE>
Prospectus Supplement
ARISTAR LOGO
$200,000,000
6.00% SENIOR NOTES DUE AUGUST 1, 2001
CHASE SECURITIES INC.
BEAR, STEARNS & CO. INC.
DEUTSCHE BANK SECURITIES
LEHMAN BROTHERS
NESBITT BURNS SECURITIES INC.
Dated July 28, 1998
