<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-80147
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 22, 1999
$250,000,000
ARISTAR LOGO
7 1/4% Senior Notes due June 15, 2006
------------------
We will pay interest on the Notes each June 15 and December 15. The first
interest payment will be made on December 15, 1999. We may not redeem the Notes
prior to their maturity on June 15, 2006. There is no sinking fund for the
Notes.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS ARISTAR, INC.
----------------- ----------------- -----------------
<S> <C> <C> <C>
Per Note..................................... 99.397% .625% 98.772%
Total........................................ $248,492,500 $1,562,500 $246,930,000
</TABLE>
(1) Plus accrued interest, if any from June 28, 1999.
Delivery of the Notes in book-entry form only, will be made on or about
June 28, 1999.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
CREDIT SUISSE FIRST BOSTON
BEAR, STEARNS & CO. INC.
DEUTSCHE BANC ALEX. BROWN
MERRILL LYNCH & CO.
The date of this prospectus supplement is June 23, 1999.
<PAGE> 2
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
ABOUT THIS PROSPECTUS SUPPLEMENT...... S-2
THE COMPANY........................... S-2
USE OF PROCEEDS....................... S-3
CERTAIN TERMS OF THE NOTES............ S-3
SUMMARY FINANCIAL INFORMATION......... S-5
UNDERWRITING.......................... S-8
NOTICE TO CANADIAN RESIDENTS.......... S-9
LEGAL OPINIONS........................ S-10
EXPERTS............................... S-10
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS
WHERE YOU CAN FIND ADDITIONAL
INFORMATION......................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... 2
THE COMPANY........................... 4
USE OF PROCEEDS....................... 5
RATIO OF EARNINGS TO FIXED CHARGES.... 5
DESCRIPTION OF DEBT SECURITIES........ 5
PLAN OF DISTRIBUTION.................. 20
</TABLE>
------------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
ABOUT THIS PROSPECTUS SUPPLEMENT
You should read this prospectus supplement carefully, along with the
prospectus that follows, before you invest. Both documents contain important
information you should consider when making your investment decision. This
prospectus supplement contains information about our 7 1/4% Senior Notes due
June 15, 2006 and the prospectus contains information about our senior debt
generally. This prospectus supplement may add, update or change information in
the prospectus.
THE COMPANY
Aristar, Inc. is a consumer financial services holding company
headquartered in Tampa, Florida. We are an indirect wholly-owned subsidiary of
Washington Mutual, Inc. Neither Washington Mutual nor any of Washington Mutual's
other subsidiaries has any obligation, direct or otherwise, with respect to any
of our unsecured senior debt, including the Notes, or any obligation to maintain
our net worth.
We make direct consumer installment and mortgage loans, and we purchase
retail installment contracts from local retail establishments, through a network
of approximately 500 branch offices in 24 states, primarily in the southeastern
United States and California. We also accept deposits in Colorado and Utah
through our subsidiary, First Community Industrial Bank. We generally operate
under the names Blazer Financial Services, City Finance Company and First
Community Financial Services.
S-2
<PAGE> 3
USE OF PROCEEDS
We will apply the proceeds from the sale of the Notes to pay at maturity
our 7 1/2% Senior Notes due July 1, 1999 in the aggregate principal amount of
$100 million and for general corporate purposes.
CERTAIN TERMS OF THE NOTES
GENERAL
The Notes will mature on June 15, 2006. An Officer's Certificate sets forth
the terms of the Notes in accordance with the Senior Indenture, dated as of June
23, 1999, between Aristar and Harris Trust and Savings Bank, as trustee. The
Notes will constitute a single series of our unsecured senior debt and will rank
equally with all of our other unsecured and unsubordinated debt. See
"Description of Debt Securities" in the prospectus for a description of the
rights under our senior debt securities, including the Notes, under the Senior
Indenture.
Aristar may, without the consent of the holders of the Notes, issue
additional notes having the same ranking and the same interest rate, maturity
and other terms as the Notes. Any additional notes will, together with the
Notes, constitute a single series of the Notes under the Indenture. No
additional notes may be issued if an Event of Default has occurred with respect
to the Notes.
The Notes will bear interest from June 28, 1999, or from the most recent
date to which we have paid or provided for interest, at the annual rate of
7 1/4%. We will pay interest semiannually on each June 15 and December 15,
beginning on December 15, 1999, to the person in whose name the Notes are
registered at the close of business on the June 1 or December 1 prior to the
payment date.
We will issue the Notes only in registered form, in denominations of
$1,000. We will pay principal and interest at the corporate trust office of the
trustee at Chicago, Illinois or at such other office or agency that we will
maintain for such purpose in New York City. At our option, we may pay interest
by check mailed to the person entitled to payment at that person's address
appearing on the register of the Notes.
The Senior Indenture permits us at any time (including more than one year
prior to the maturity of the Notes) to discharge our obligations on the Notes by
providing for payment when due of the principal and interest and by satisfying
certain other conditions described under "Description of Debt Securities --
Satisfaction and Discharge" in the prospectus.
The Notes are not redeemable before maturity.
BOOK-ENTRY SYSTEM
The Notes will be represented by one or more Global Securities that we will
deposit with DTC or its agent. We will register the Notes 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.
The Notes will settle in DTC's Same-Day Funds Settlement System and trade
in that system in book-entry form until maturity. Therefore, secondary market
trading activity for the Notes will settle in immediately available funds. We
will pay principal and interest to DTC in immediately available funds. There can
be no assurance as to the effect, if any, that settlement in immediately
available funds will have on trading activity in the Notes.
DTC has advised as follows: It is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended. DTC was created to hold securities
for its participating organizations and to facilitate the clearance and
settlement of securities transactions between participants in such securities
through electronic book-entry changes in accounts of its participants. Direct
participants
S-3
<PAGE> 4
include securities brokers and dealers (including the underwriters), banks and
trust companies, clearing corporations and certain other organizations. Access
to DTC's system is also available to indirect participants such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a direct participant, either directly or indirectly. Persons
who are not participants may beneficially own securities held by DTC only
through participants.
Under the terms of the Senior Indenture, we and the trustee will treat the
persons in whose names the Notes are registered as the owners of the Notes for
the purpose of receiving payment of principal and interest on the Notes and for
all other purposes. DTC has no knowledge of the actual owners of beneficial
interests in the Global Securities representing the Notes. DTC's records reflect
only the identity of the direct participants to whose accounts the Notes are
credited, which may or may not be the beneficial owners. DTC's participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
DTC may discontinue providing its services as securities depositary with
respect to the Notes at any time by giving reasonable notice to the trustee or
to us, or we may decide to discontinue use of the system of book-entry transfers
through DTC. Under such circumstances, and if we do not obtain a successor
securities depositary, we will have certificates printed and delivered.
DTC has also advised that the provisions set forth under "Description of
Debt Securities -- Global Securities -- Book-Entry Securities" in the prospectus
will apply to the Global Securities.
DTC has further advised that its management is aware that some computer
applications, systems and the like for processing data that are dependent upon
calendar dates, including dates before, on, and after January 1, 2000, may
encounter "Year 2000 problems." DTC has informed its participants and other
members of the financial community that it has developed and is implementing a
program so that its systems continue to function appropriately, as they relate
to:
- the timely payment of distributions (including principal and interest
payments) to security holders,
- book-entry deliveries, and
- settlement of trades within DTC.
This program includes a technical assessment and a remediation plan, each of
which is complete. Additionally, DTC's plan includes a testing phase, which is
expected to be completed within appropriate time frames.
However, DTC's ability properly to perform its services also depends upon
other parties, including but not limited to issuers and their agents, as well as
third party vendors from whom DTC licenses software and hardware, and third
party vendors on whom DTC relies for information or the provision of services,
including telecommunication and electrical utility service providers, among
others. DTC has informed its participants and other members of the financial
community that it is contacting (and will continue to contact) third party
vendors from whom DTC acquires services to:
- impress upon them the importance of such services being Year 2000
compliant, and
- determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services.
In addition, DTC is in the process of developing such contingency plans as it
deems appropriate.
According to DTC, it has provided the foregoing information with respect to
DTC to its participants and other members of the financial community for
informational purposes only. The information is not intended to serve as a
representation, warranty, or contract modification of any kind.
We have obtained the information in this section concerning DTC and DTC's
book-entry system from sources that we believe to be reliable. We take no
responsibility for the accuracy of such information.
S-4
<PAGE> 5
SUMMARY FINANCIAL INFORMATION
We have derived selected financial data presented in the table on the next
page for, and as of the end of, each of the three years in the three-year period
ended December 31, 1998 from our audited consolidated financial statements. We
have derived the selected financial data presented in the table for, and as of
the end of, each of the three-month periods ended March 31, 1999 and 1998 from
our unaudited interim consolidated financial statements. In management's
opinion, such unaudited information includes all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation. Results for the
three months ended March 31, 1999 are not indicative of results for the full
fiscal year, nor are they necessarily indicative of results for any future
period. The information in the table is qualified entirely by reference to the
consolidated financial statements and other information incorporated by
reference in this prospectus supplement and the prospectus, as described in the
prospectus under "Incorporation of Certain Documents by Reference."
On April 30, 1996, Great Western Bank, a Federal Savings Bank ("GW Bank"),
transferred to us a portion of its consumer finance business to which we refer
in this prospectus supplement as Great Western Financial Services ("GW Financial
Services"). GW Financial Services consisted primarily of approximately $242
million in net consumer finance receivables. We paid fair value (as determined
by independent appraisal) of approximately $252 million in cash. We accounted
for the approximately $10 million premium as a dividend to Great Western
Financial Corporation ("Great Western"). Until it merged with and into a
wholly-owned subsidiary of Washington Mutual on July 1, 1997, Great Western was
GW Bank's parent and ours. At the purchase date, we also recorded a transfer to
GW Bank of approximately $15 million, representing the accumulated earnings of
GW Financial Services at that time.
On December 31, 1996, Great Western transferred to us a portion of its
consumer banking business to which we refer in this prospectus supplement as
Blazer Financial Corporation. Blazer consisted primarily of approximately $229
million in net consumer finance receivables and $147 million in customer
deposits. At the purchase date, we recorded a transfer to Great Western of
approximately $35 million, representing Blazer's accumulated earnings at that
time.
We have accounted for both of the acquisitions described above in a manner
similar to a pooling of interests. Accordingly, we have recorded the assets
acquired and liabilities assumed at historical cost. We have restated our prior
period financial statements for the acquisitions. We have eliminated material
intercompany transactions between the combined entities.
S-5
<PAGE> 6
INCOME STATEMENT DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------ -------------------
1996 1997 1998 1998 1999
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Loan interest and fee income.......... $366,750 $365,719 $404,954 $ 97,212 $110,694
Investment securities income.......... 9,183 10,373 11,449 2,855 2,498
-------- -------- -------- -------- --------
Total interest income............... 375,933 376,092 416,403 100,067 113,192
Interest and debt expense............. 120,758 128,887 133,211 33,160 34,804
-------- -------- -------- -------- --------
Net interest income before provision
for credit losses................... 255,175 247,205 283,192 66,907 78,388
Provision for credit losses........... 58,800 66,600 79,760 18,000 25,600
-------- -------- -------- -------- --------
Net interest income................. 196,375 180,605 203,432 48,907 52,788
Other income.......................... 27,205 26,555 27,147 6,489 6,655
Other expenses
Personnel expenses.................. 71,724 69,468 76,664 19,059 19,156
Other operating expenses............ 52,338(1) 61,661 66,328 14,901 15,491
-------- -------- -------- -------- --------
124,062 131,129 142,992 33,960 34,647
-------- -------- -------- -------- --------
Income before income taxes............ 99,518 76,031 87,587 21,436 24,796
Provision for federal and state income
taxes(2)............................ 37,000 29,744 34,700 8,500 9,670
-------- -------- -------- -------- --------
Net income............................ $ 62,518 $ 46,287 $ 52,887 $ 12,936 $ 15,126
======== ======== ======== ======== ========
Ratio of earnings to fixed
charges(3).......................... 1.80 1.57 1.64 1.63 1.69
</TABLE>
- ---------------
(1) In May 1996, we 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. We have reflected the $8.0 million recovery
as a reduction of other operating expenses.
(2) Washington Mutual includes us in its consolidated Federal income tax return.
We will pay currently payable Federal income taxes 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 we
would have paid on a separate entity basis. Deferred income taxes are
provided on elements of income or expense that we recognize in different
periods for financial and tax reporting purposes.
(3) We calculate the ratio of earnings to fixed charges as described in the
prospectus under "Ratio of Earnings to Fixed Charges."
S-6
<PAGE> 7
BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1997 1998 1999
------------ ------------ -----------
(DOLLARS IN THOUSANDS)(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Finance receivables, net.............................. $2,254,389 $2,493,903 $2,539,015
Investment securities................................. 154,475 150,820 147,325
Cash and cash equivalents............................. 26,446 24,180 24,254
Other assets.......................................... 74,296 75,807 77,962
---------- ---------- ----------
Total assets................................ $2,509,606 $2,744,710 $2,788,556
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Short-term debt..................................... $ 357,532 $ 560,823 $ 428,552
Long-term debt...................................... 1,472,872 1,427,167 1,572,024
---------- ---------- ----------
Total debt.................................. 1,830,404 1,987,990 2,000,576
Customer deposits................................... 163,185 187,518 198,021
Accounts payable and other liabilities.............. 117,627 145,430 146,935
Federal and state income taxes...................... 206 4,442 13,442
---------- ---------- ----------
Total liabilities........................... 2,111,422 2,325,380 2,358,974
Total stockholder's equity............................ 398,184 419,330 429,582
---------- ---------- ----------
Total liabilities and stockholder's
equity.................................... $2,509,606 $2,744,710 $2,788,556
========== ========== ==========
</TABLE>
S-7
<PAGE> 8
UNDERWRITING
Under the terms and subject to the conditions contained an underwriting
agreement dated June 23, 1999, we have agreed to sell to the underwriters named
below, for whom Credit Suisse First Boston Corporation is acting as
representative, the following respective principal amount of Notes:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF NOTES
UNDERWRITERS ----------------
<S> <C>
Credit Suisse First Boston Corporation...................... $ 62,500,000
Bear, Stearns & Co. Inc. ................................... 62,500,000
Deutsche Bank Securities Inc................................ 62,500,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 62,500,000
------------
Total............................................. $250,000,000
============
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the Notes if any are purchased. The underwriting agreement
provides that if an underwriter defaults the purchase commitments of
non-defaulting underwriters may be increased or the offering of Notes may be
terminated.
The underwriters propose to offer the Notes initially at the public
offering price on the cover of this prospectus supplement, and to selling group
members at that price less a concession of .375% of the principal amount per
Note. The underwriters and selling group members may allow a discount of .250%
of the principal amount of the Notes on sales to other broker/dealers. After the
initial public offering, the public offering price, concession and discount to
broker/dealers may be changed by the representative.
We estimate that our out of pocket expenses for this offering will be
approximately $225,000.
The Notes are a new issue of securities with no established trading market.
We do not intend to list the Notes on a national securities exchange. One or
more of the underwriters intends to make a secondary market in the Notes.
However, they are not required to do so and may discontinue making a secondary
market at any time without notice. We can give no assurance as to how liquid the
trading market for the Notes will be.
We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or contribute to payments that the underwriters may be required
to make in that respect.
The representative, on behalf of the underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Over-allotment involves syndicate
sales in excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase the underlying security so long
as the stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Notes in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the representatives to reclaim a selling concession from a
syndicate member when the Notes originally sold by such syndicate member are
purchased in a syndicate covering transaction to cover syndicate short
positions. These stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the Notes to be higher than it would
otherwise be in the absence of these transactions. These transactions, if
commenced, may be discontinued at any time.
Some of the underwriters or their affiliates have provided commercial or
investment banking services to us or our parent, Washington Mutual, and certain
of its affiliates, and may provide these services in the future. They receive
customary fees and commissions for these services. Affiliates of Deutsche Banc
Alex. Brown are lenders under our revolving credit agreement. We are currently
in compliance in all material respects with the terms of our revolving credit
facility. The decision of Deutsche Banc Alex. Brown to distribute the Notes
offered hereby was made independent of the affiliates of Deutsche Banc Alex.
Brown who are lenders under the revolving credit agreement and the affiliated
lenders had no involvement in determining whether or when to distribute the
Notes under this offering or the terms of this offering. Deutsche Banc Alex.
Brown will not receive any benefit from this offering other than its portion of
the underwriting fee.
S-8
<PAGE> 9
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Notes in Canada is being made only on a private
placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of Notes are effected. Accordingly, any resale of the Notes in Canada
must be made in accordance with applicable securities laws which will vary
depending on the relevant jurisdiction, and which may require resales to be made
in accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the Notes.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Notes in Canada who receives a purchase confirmation will
be deemed to represent to us and the dealer from whom such purchase confirmation
is received that (i) such purchaser is entitled under applicable provincial
securities laws to purchase such Notes without the benefit of a prospectus
qualified under such securities laws, (ii) where required by law, that such
purchaser is purchasing as principal and not as agent, and (iii) such purchaser
has reviewed the text above under "Resale Restrictions".
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgement obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Notes to whom the Securities Act (British Columbia) applies
is advised that such purchaser is required to file with the British Columbia
Securities Commission a report within ten days of the sale of any acquired by
such purchaser pursuant to this offering. Such report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR #95/17, a
copy of which may be obtained from us. Only one such report must be filed in
respect of Notes acquired on the same date and under the same prospectus
exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of Notes should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the Notes in
their particular circumstances and with respect to the eligibility of the Notes
for investment by the purchaser under relevant Canadian legislation.
S-9
<PAGE> 10
LEGAL OPINIONS
Heller Ehrman White & McAuliffe, Seattle, Washington, will pass upon the
legality of the Notes for us. Simpson Thacher & Bartlett, New York, New York,
will pass upon certain legal matters in connection with the Notes for the
underwriters. As of June 16, 1999, Heller Ehrman White & McAuliffe and
individual attorneys at the firm who participated in this transaction owned an
aggregate of 8,501 shares of the common stock of Washington Mutual, our ultimate
parent.
EXPERTS
We have incorporated in the prospectus our consolidated financial
statements as of December 31, 1998 and 1997, and for each of the years in the
three-year period ended December 31, 1998 by reference to our Annual Report on
Form 10-K for the year ended December 31, 1998 in reliance upon the report of
Deloitte & Touche LLP, independent auditors, as of and for the years ended
December 31, 1998 and 1997, and the report of PricewaterhouseCoopers LLP,
independent auditors, as of and for the year ended December 31, 1996, given on
the authority of those firms as experts in auditing and accounting.
S-10
<PAGE> 11
PROSPECTUS
$1,000,000,000
ARISTAR LOGO
DEBT SECURITIES
-------------------------
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. This
means:
- we may issue the debt securities covered by this prospectus from time to
time;
- we will provide a prospectus supplement each time we issue the debt
securities;
- the prospectus supplement will provide specific information about the
terms of that issuance and also may add, update or change information
contained in this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE DEBT SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is June 22, 1999.
<PAGE> 12
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and current reports, and other information with
the Securities and Exchange Commission. You may read and copy any reports and
other information filed by us at the SEC's Public Reference Rooms at (a) 450
Fifth Street, N.W., Washington, D.C. 20549; (b) Citicorp Center, 500 West
Madison Street, 14th Floor, Chicago, Illinois 60661-2511; and (c) 7 World Trade
Center, 13th Floor, New York, New York 10048. You can also obtain copies of
these documents, upon payment of a duplicating fee, by writing to the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the SEC's Public Reference Rooms. Our SEC filings are also available to the
public on the SEC's Internet site (http://www.sec.gov). Because certain of our
debt securities are listed on the New York Stock Exchange, our reports and other
information may be inspected at the offices of the Exchange at 20 Broad Street,
New York, New York 10005.
We have filed a registration statement on Form S-3 with the SEC covering
the debt securities described in this prospectus. For further information with
respect to us and those securities, you should refer to our registration
statement and its exhibits. You may inspect and copy the registration statement,
including exhibits, at the SEC's Public Reference Rooms or Web site. We have
summarized certain key provisions of contracts and other documents that we refer
to in this prospectus. Because a summary may not contain all the information
that is important to you, you should review the full text of each document. We
have included copies of these documents as exhibits to our registration
statement.
Each of the Indentures (as defined herein) pursuant to which the debt
securities are being issued requires Aristar to file reports under the
Securities Exchange Act of 1934, as amended (the "Exchange 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 SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to another document that we filed with the SEC. The information
incorporated by reference is an important part of this prospectus, and
information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act until we sell all of the securities.
- Our Annual Report to Shareholders on Form 10-K for the fiscal year ended
December 31, 1998;
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Our Current Reports on Form 8-K dated January 25, 1999, as amended on
February 9, 1999; May 10, 1999; and May 18, 1999.
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<PAGE> 13
You may obtain a copy of these filings (other than exhibits) at no cost, by
writing or telephoning us at 8900 Grand Oak Circle, Tampa, Florida 33637-1050,
telephone (813) 632-4500, attention Chief Financial Officer.
You should rely only on the information contained or incorporated by
reference in this prospectus, any supplemental prospectus or any pricing
supplement. We have not authorized anyone to provide you with any other
information. We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information in this
prospectus, any accompanying prospectus supplement or any document incorporated
by reference is accurate as of any date other than the date on the front of the
document.
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<PAGE> 14
ARISTAR, INC.
Aristar, Inc. is a holding company headquartered in Tampa, Florida whose
subsidiaries are engaged in the consumer financial services business. Aristar is
an indirect, wholly-owned subsidiary of Washington Mutual, Inc.
Our operations consist principally of a network of approximately 500 branch
offices located in 24 states, primarily in the Southeast and Southwest. These
offices generally operate under the names Blazer Financial Services, City
Finance Company and First Community Financial Services. The branch offices are
typically located in small to medium-sized communities in suburban or rural
areas and are managed by individuals who generally have considerable consumer
lending experience
We make consumer loans, both real estate secured and unsecured, and
purchase retail sales contracts from local retail establishments. These consumer
credit transactions are primarily for personal, family or household purposes.
The primary market for Aristar's consumer loans consists of households with an
annual income of $30,000 to $60,000. Consumer loans are typically unsecured and
primarily used by the customer to make specific purchases of consumer goods or
for personal debt consolidation. As of December 31, 1998 and 1997, the average
balance of a personal loan was approximately $2,100 and $1,800, respectively.
Consumer loans written in 1998 had original terms ranging from 12 to 360 months
and averaged 63 months. As of December 31, 1998, 45.0% of Aristar's total
portfolio was either unsecured or secured by automobiles or other personal
property ("personal loans") and 43.6% of our total portfolio was secured by real
estate. In 1997, these loan types comprised 44.0% and 42.0% of the portfolio,
respectively. This change in portfolio mix is a result of our management's focus
on growth in these higher margin components of the portfolio.
Real estate loans are typically secured by first or second mortgages and
are primarily used by the customer for debt consolidation. While the interest
yield on real estate secured loans is generally lower than for other installment
loans, such loans are typically larger and the ratio of cost to amounts loaned
is lower. Additionally, credit loss experience on real estate secured loans has
been significantly lower than on other loan types.
Retail sales contracts are generally acquired without recourse to the
originating merchant and provide a vehicle for developing future loan business.
Where these contracts result from the sale of consumer goods, payment is
generally secured by such goods. Retail installment contracts are generally
acquired through the originating merchant; Aristar had such arrangements with
over 3,000 merchants at December 31, 1998. Contracts are typically written with
original terms from 3 to 60 months and for 1998 had an average original term of
27 months. A portion of Aristar's retail installment contracts are "same as
cash." This provides a period during which the customer is allowed to pay the
account balance in full without interest charges. We recognize interest income
only on the portion of these receivables which we estimate will not exercise the
"same as cash" option. At December 31, 1998 and 1997, the average balance of a
retail sales contract was $800 and $750, respectively.
Aristar also provides consumer financial services through its industrial
banking subsidiary in Colorado and Utah. In addition to making consumer loans
and purchasing retail sales contracts, this subsidiary also takes customers'
savings deposits (insured by the Federal Deposit Insurance Corporation).
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Our principal executive offices are located at 8900 Grand Oak Circle,
Tampa, Florida 33637-1050, telephone number (813) 632-4500.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, Aristar
will use the net proceeds from the sale of the Debt Securities for general
corporate purposes. Examples of general corporate purposes include additions to
working capital, repayment of existing debt, acquisitions, and office
expansions.
RATIO OF EARNINGS TO FIXED CHARGES
The following table contains Aristar's ratio of earnings to fixed charges
for each of the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
- ------------------------------- -------------
1994 1995 1996 1997 1998 1998 1999
- ---- ---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C>
1.96 1.91 1.80 1.57 1.64 1.63 1.69
</TABLE>
For purposes of this ratio, earnings consist of earnings before income
taxes plus fixed charges. Fixed charges consist of interest expense and the
estimated interest portion of rent expense.
DESCRIPTION OF DEBT SECURITIES
Aristar may from time to time offer under this prospectus unsecured debt
securities, which may be senior debt securities or subordinated debt securities.
The aggregate offering price of the debt securities offered by Aristar by a
prospectus supplement will not exceed $1,000,000,000.
The following description of the debt securities sets forth the material
terms and provisions of the debt securities to which any prospectus supplement
may relate. The senior debt securities are to be issued under an indenture (the
"Senior Indenture"), between Aristar and Harris Trust and Savings Bank, as
trustee, a copy of which is filed as an exhibit to the registration statement of
which this prospectus is a part. The subordinated debt securities are to be
issued under an indenture (the "Subordinated Indenture") between Aristar and
Harris Trust and Savings Bank, as trustee, a copy of the form of which is filed
as an exhibit to the registration statement of which this prospectus is a part.
The Senior Indenture and the Subordinated Indenture are sometimes referred to
collectively as the "Indentures" and each individually as an "Indenture." The
particular terms of the debt securities offered by any prospectus supplement
(the "Offered Securities") and the extent, if any, to which such general
provisions may apply to the Offered Securities, will be described in the
prospectus supplement relating to such Offered Securities.
The following summaries of the material provisions of the Indentures and
the debt securities do not purport to be complete and are subject to, and are
qualified in their
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entirety by reference to all of the provisions of the Indentures, including the
definitions therein of certain terms, and such debt securities. Wherever
particular articles, sections or defined terms of an Indenture are referred to,
it is intended that such articles, sections or defined terms shall be
incorporated herein by reference, and the statement in connection with which
such reference is made is qualified in its entirety by such reference. The
Indentures are substantially identical, except for certain covenants made by
Aristar and provisions relating to subordination.
GENERAL
The Indentures do not limit the aggregate principal amount of debt
securities which may be issued thereunder and provide that debt securities may
be issued thereunder from time to time in one or more series. (Section 3.1) The
Indentures do not limit the amount of other indebtedness or debt securities,
other than certain secured indebtedness as described below, which may be issued
by Aristar or its subsidiaries.
Unless otherwise provided in a prospectus supplement, the senior debt
securities will be unsecured obligations of Aristar and will rank on a parity
with all other unsecured and unsubordinated indebtedness of Aristar. The
subordinated debt securities will be unsecured obligations of Aristar,
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness (which term includes senior debt securities) of Aristar as
described below under "Subordination of Subordinated Debt Securities" and in the
applicable prospectus supplement.
Neither Washington Mutual, Aristar's ultimate parent, nor any of Washington
Mutual'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
Aristar or (iii) any agreement with respect to the continuation of the present
ownership of the Aristar.
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 that 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.
The prospectus supplement relating to the particular debt securities
offered thereby will describe 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;
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(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 year 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 Aristar 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 Aristar 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 Aristar 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 Aristar 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.
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STATUS OF SENIOR DEBT SECURITIES
The senior debt securities will be unsecured and unsubordinated general
obligations of Aristar and will rank on a parity with all other unsecured and
unsubordinated indebtedness of Aristar.
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
May 31, 1999, Senior Debt aggregated approximately $1.45 billon. The
Subordinated Indenture does not limit or restrict our ability to incur
additional Senior Debt, but certain of our other debt instruments 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 Aristar's assets to our creditors by reason of
any liquidation, dissolution or winding up of Aristar or any receivership,
insolvency, bankruptcy or similar proceeding relative to Aristar 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 Aristar, 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 Indenture to include all indebtedness of Aristar
or any Consolidated Subsidiary representing money borrowed, except indebtedness
owed to Aristar by any Consolidated Subsidiary or owed to any Consolidated
Subsidiary by Aristar or any other Consolidated Subsidiary, and includes
indebtedness of any other person for money borrowed when such indebtedness is
guaranteed by Aristar or any Consolidated Subsidiary. The term "Debt" shall be
deemed to include the liability of Aristar 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 Aristar'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.
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Subordinated debt securities will rank on a parity with all other
Subordinated Debt. Subordinated debt securities are senior to Aristar'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 any
transfer agent designated by Aristar for such purpose with respect to any series
of debt securities 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.
Aristar 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 Aristar with respect to any series
of debt securities, Aristar 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, Aristar 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, Aristar 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. Aristar may at any time designate additional
transfer agents with respect to any series of debt securities.
In the event of any redemption in part, Aristar 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
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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 a 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 Aristar 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 Aristar or the delivery by Aristar 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 Aristar in the United States or by check mailed 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 Aristar'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, Aristar 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 Aristar may designate from time to time, except that at the
option of Aristar 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 a prospectus supplement, payment
of any
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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 a prospectus supplement, the Corporate Trust
Office of each trustee in the city of Chicago will be designated as Aristar's
sole Paying Agent for payments with respect to Offered Securities that are
issuable solely as Registered Securities and the office of each trustee's
affiliate as Aristar'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 Aristar for the Offered Securities will be named in a prospectus
supplement. Aristar 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, Aristar 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, Aristar 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, Aristar 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 Aristar 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 Aristar and the
Holder of such Debt Security or coupon will thereafter look only to Aristar 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.
The specific terms of the depositary arrangement with respect to any debt
securities of a series will be described in a prospectus supplement relating to
such series. Aristar anticipates that the following provisions will apply to all
depositary arrangements with a U.S. Depositary or Common Depositary.
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BOOK-ENTRY SECURITIES
Unless otherwise specified in a 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 Aristar, if such debt
securities are offered and sold directly by Aristar. 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 Aristar, 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.
Aristar 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. Aristar 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.
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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 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 Aristar within ninety
days, Aristar will issue debt securities in definitive registered form in
exchange for the Global Security or Securities representing such debt
securities. In addition, Aristar 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 a 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 a 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 such 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 a 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, a 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
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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 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
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Columbia), its territories, its possessions, the Commonwealth of Puerto Rico and
other areas subject to its jurisdiction.
ABSENCE OF RESTRICTIVE COVENANTS
Aristar 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 Aristar.
MERGER AND CONSOLIDATION
Each Indenture provides that Aristar, 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
Aristar, provided that: (i) the successor is a corporation organized under the
laws of any domestic jurisdiction; (ii) the successor, if other than Aristar,
assumes Aristar'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.
Each Indenture provides that, upon any consolidation or merger or transfer
or lease of the properties and assets of Aristar substantially as an entirety in
accordance with the preceding paragraph, the successor corporation formed by
such consolidation or into which Aristar is merged or to which such transfer or
lease is made shall be substituted for Aristar with the same effect as if such
successor corporation had been named as Aristar. Thereafter, Aristar 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 Aristar may thereupon or any time thereafter be
liquidated and dissolved.
SATISFACTION AND DISCHARGE
Unless a prospectus supplement provides otherwise, Aristar will be
discharged from its obligations under the outstanding debt securities of a
series upon satisfaction of the following conditions: (a) Aristar has
irrevocably deposited with the trustee either (1) money in an amount as will, or
(2) U.S. Government Obligations as will, together with the predetermined and
certain income to accrue thereon without consideration of any reinvestment
thereof, or (3) a combination of (1) and (2) as will (in a written opinion with
respect to (2) or (3) 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) Aristar 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
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complied with; and (d) the trustee has received (1) a ruling directed to Aristar
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 Aristar'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, (2) an opinion of tax counsel to
the same effect as the ruling described in clause (1) above and based upon a
change in law, or (3) an instrument, in form reasonably satisfactory to the
trustee, wherein Aristar, notwithstanding such deposit and discharge, pursuant
to the relevant Indenture, of its indebtedness in respect of debt securities of
any series, or any portion of the principal amount thereof, shall assume the
obligation (which shall be absolute and unconditional) to irrevocably deposit
with the trustee such additional sums of money, if any, or additional U.S.
Government Obligations (meeting the requirements of such Indenture), if any, or
any combination thereof, at such time or times, as shall be necessary, together
with the money and/or U.S. Government Obligations theretofore so deposited, to
pay when due the principal of and premium, if any, and interest due and to
become due on such debt securities or portions thereof; provided, however, that
such instrument may state that the obligation of Aristar to make additional
deposits as aforesaid shall be subject to the delivery to Aristar by the trustee
of a notice asserting the deficiency accompanied by an opinion of an independent
public accountant of nationally recognized standing, selected by the trustee,
showing the calculation thereof. Upon such discharge, Aristar 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 Aristar 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 Aristar'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 Aristar, 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:
(1) change the maturity of the principal of, or any installment of
principal of or interest on, any of the debt securities;
(2) reduce the principal amount thereof (or any premium thereon) or
the rate of interest, if any, thereon;
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(3) reduce the amount of the principal of Original Issue Discount
Securities payable on any acceleration of maturity;
(4) change any obligation of Aristar to maintain an office or agency
in the places and for the purposes required by such Indenture;
(5) impair the right to institute suit for the enforcement of any such
payment on or after the applicable maturity date;
(6) 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
(7) 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:
(1) a default for 30 days in the payment when due of any interest on
such series of debt securities;
(2) 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;
(3) 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);
(4) certain events of bankruptcy, insolvency or reorganization;
(5) 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
(6) 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.
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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 (1)
such direction shall not be in conflict with any rule of law or with the
Indenture, (2) the trustee may take any other action deemed proper that is not
inconsistent with such direction and (3) 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 (1) 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 (2) 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
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 Aristar 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.
Aristar 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 Aristar 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
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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 Aristar 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 (1) the Holders of a
majority in principal amount of the outstanding debt securities of that series
and (2) 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 (1) the Holders of such specified percentage
in principal amount of the outstanding debt securities of that series and (2) 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 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. Aristar, the appropriate trustee and any agent of Aristar 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
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and notwithstanding any notice to the contrary) for the purpose of making
payment and for all other purposes.
PLAN OF DISTRIBUTION
Aristar 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 underwriter
or agent involved in the offer and sale of the Offered Securities will be named
in an applicable prospectus supplement.
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 Aristar 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 Aristar
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 Aristar will be described, in a 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 Aristar, underwriters,
dealers and agents who participate in the distribution of debt securities may be
entitled to indemnification by Aristar against certain liabilities, including
certain liabilities under the Securities Act of 1933, as amended.
LEGAL OPINIONS
The legality of the debt securities will be passed upon for Aristar by
Heller Ehrman White & McAuliffe, Seattle, Washington. Certain legal matters in
connection with the debt securities will be passed upon for any underwriters or
agents by Simpson Thacher & Bartlett, New York, New York. As of June 7, 1999,
Heller Ehrman White & McAuliffe and individual attorneys at the firm who
participated in this transaction owned an aggregate of 8,501 shares of the
common stock of Washington Mutual, our ultimate parent.
EXPERTS
We have incorporated in the prospectus our consolidated financial
statements as of December 31, 1998 and 1997, and for each of the years in the
three-year period ended December 31, 1998 by reference to our Annual Report on
Form 10-K for the year ended December 31, 1998 in reliance upon the report of
Deloitte & Touche LLP, independent auditors, as of and for the years ended
December 31, 1998 and 1997, and the report of PricewaterhouseCoopers LLP,
independent auditors, as of and for the year ended December 31, 1996, given on
the authority of those firms as experts in auditing and accounting.
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ARISTAR LOGO
