<PAGE> 1
PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(2)
(To Prospectus Dated June 23, 1997) File No. 333-29049
$150,000,000
ARISTAR LOGO
ARISTAR, INC.
6.00% SENIOR NOTES DUE MAY 15, 2002
------------------------
The Notes bear interest at the rate of 6.00% per year. Interest on the
Notes is payable on May 15 and November 15 of each year, beginning November 15,
1999. The Notes will mature on May 15, 2002. The Notes are not redeemable before
maturity. The Notes will be issued only in registered form in denominations of
$1,000.
The Notes are unsecured and rank equally with all of our other senior
unsecured and unsubordinated debt. There is currently no public market for the
Notes, and we do not intend to apply for listing of the Notes on any national
securities exchange.
------------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public Offering Price(1)................................ 99.784% $149,676,000
Underwriting Discount................................... 0.350% $ 525,000
Proceeds, before expenses, to Aristar, Inc.............. 99.434% $149,151,000
</TABLE>
- ---------------
(1) Plus accrued interest from May 17, 1999 if settlement occurs after that
date.
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.
The Notes will be ready for delivery in book-entry form only through The
Depository Trust Company on or about May 17, 1999.
------------------------
NATIONSBANC MONTGOMERY SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
FIRST UNION CAPITAL MARKETS CORP.
NESBITT BURNS SECURITIES INC.
------------------------
The date of this prospectus supplement is May 12, 1999.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<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-7
Legal Opinions....................... S-7
Experts.............................. S-8
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 3
Use of Proceeds...................... 3
Ratio of Earnings to Fixed Charges... 4
Description of Debt Securities....... 4
Plan of Distribution................. 15
</TABLE>
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 6.00% Senior Notes due May 15, 2002,
and the prospectus contains information about our senior debt generally. This
prospectus supplement may add, update or change information in the prospectus.
You should rely only on the information provided or incorporated by reference in
this prospectus supplement and the prospectus. We have not authorized anyone
else to provide you with different information. If this prospectus supplement is
inconsistent with the prospectus, rely on this prospectus supplement. The
information in this prospectus supplement is accurate as of May 12, 1999.
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
6 3/4% Senior Notes due May 15, 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 May 15, 2002 and will be limited to $150 million
aggregate principal amount. An Officer's Certificate sets forth the terms of the
Notes in accordance with the Senior Indenture, dated as of October 1, 1997,
between Aristar and First Union National 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.
The Notes will bear interest from May 17, 1999, or from the most recent date to
which we have paid or provided for interest, at the annual rate of 6.00%. We
will pay interest semiannually on each May 15 and November 15, beginning on
November 15, 1999, to the person in whose name the Notes are registered at the
close of business on the May 1 or November 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
40 Broad Street, Suite 550, New York, New York 10004 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 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
S-3
<PAGE> 4
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)
<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."
BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, MARCH 31,
1997 1998 1999
------------ ------------ ----------
(DOLLARS IN THOUSANDS)
<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-6
<PAGE> 7
UNDERWRITING
We have entered into an Underwriting Agreement dated May 12, 1999 among Aristar
and each of the underwriters named below. Subject to certain conditions, each
underwriter has severally agreed to purchase the principal amount of Notes
indicated in the following table below. The underwriters will purchase all of
the Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF NOTES
UNDERWRITERS ----------------
<S> <C>
NationsBanc Montgomery
Securities LLC........... $ 90,000,000
Banc One Capital Markets,
Inc...................... 20,000,000
First Union Capital Markets
Corp. ................... 20,000,000
Nesbitt Burns Securities
Inc. .................... 20,000,000
------------
Total:........... $150,000,000
============
</TABLE>
We will also pay our issuing expenses estimated at $250,000. We will file the
Underwriting Agreement with the Securities and Exchange Commission as an exhibit
to a Current Report on Form 8-K.
The underwriters have advised us that they propose initially to offer the Notes
to the public at the public offering price set forth on the cover of this
prospectus supplement, and to certain dealers at such price less a concession
not in excess of .210% of the principal amount of the Notes. The underwriters
may allow, and such dealers may reallow, a discount not in excess of .150% of
the principal amount of the Notes to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.
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. Although the
underwriters have advised us that they intend to make a market in the Notes in
the secondary trading market, they are not required to do so and may stop their
market making activities at any time without notice. We can give no assurance as
to the liquidity of the Notes or the trading market for them.
To facilitate this offering, the underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the Notes. Specifically,
the underwriters may over-allot in connection with the offering, creating a
short position in the Notes for their own account. In addition, to cover
over-allotments or to stabilize the price of the Notes, the underwriters may bid
for and purchase Notes in the open market. Finally, the underwriting syndicate
may reclaim selling concessions allowed to an underwriter or a dealer if the
syndicate repurchases previously distributed Notes in transactions to cover
syndicate short positions, in stabilization transactions or otherwise.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the Notes to be higher than it
might be in the absence of such purchases.
The underwriters do not, nor do we, make any representation or prediction as to
the direction or magnitude of any effect that the transactions described above
may have on the price of the Notes. In addition, neither we nor any of the
underwriters make any representation that the underwriters will engage in such
transactions or that such transactions, once commenced, will not be discontinued
without notice.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
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 NationsBanc
Montgomery Securities LLC and First Union Capital Markets Corp. are lenders
under our revolving credit agreement.
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
S-7
<PAGE> 8
matters in connection with the Notes for the underwriters. Heller Ehrman White &
McAuliffe will rely on the opinion of Simpson Thacher & Bartlett as to matters
of New York law. As of May 12, 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-8
<PAGE> 9
PROSPECTUS
$850,000,000
ARISTAR LOGO
DEBT SECURITIES
------------------------
Aristar, Inc. (the "Company") may offer from time to time up to
$850,000,000 aggregate principal amount of its debt securities (the "Debt
Securities"). The Debt Securities may be senior Debt Securities (the "Senior
Debt Securities") or subordinated Debt Securities (the "Subordinated Debt
Securities"). The Debt Securities will be offered in one or more separate series
in amounts, at prices and on terms to be determined at the time of offering. See
"Plan of Distribution."
The Debt Securities may be issued in registered form without coupons or in
bearer form with or without coupons. In addition, all or a portion of the Debt
Securities may be issued in temporary or definitive global form. Debt Securities
which are Book-Entry Securities (as defined herein) will be issued in global
registered form. Debt Securities in bearer form are subject to United States tax
law requirements, and, subject to certain exceptions, may not be offered, sold
or delivered within the United States or to United States persons (each as
defined herein).
The specific designation, aggregate principal amount, authorized
denominations, maturity, rate (or method of determining the same) and time of
payment of interest, if any, any redemption or repurchase terms, any listing on
a securities exchange, the initial public offering price, the names of, and the
principal amounts to be purchased by or through, underwriters, dealers or
agents, if any, the compensation of such persons and other special terms in
connection with the offering and sale of the series of Debt Securities in
respect of which this Prospectus is being delivered (the "Offered Securities")
are set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement").
The Senior Debt Securities, when issued, will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. The Subordinated
Debt Securities, when issued, will be unsecured and subordinated to all present
and future Senior Debt (as defined herein) of the Company, will rank on a parity
with all other Subordinated Debt (as defined herein) of the Company, and will be
senior to the Company's common stock.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
June 23, 1997
<PAGE> 10
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN, OR INCORPORATED BY REFERENCE IN, THIS PROSPECTUS
OR THE PROSPECTUS SUPPLEMENT, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY AGENT, UNDERWRITER OR DEALER. THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE DEBT SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY
OF THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT
THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THEIR RESPECTIVE DATES.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission at 500 West Madison Street, 14th Floor, Chicago, Illinois 60661, and
7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants, like the Company, that
file electronically with the Commission at the following address:
http://www.sec.gov. Certain debt securities of the Company are listed on the New
York Stock Exchange, and reports and other information concerning the Company
can be inspected at the offices of such exchange at 20 Broad Street, New York,
New York 10005. This Prospectus does not contain all of the information set
forth in the Registration Statement on Form S-3 and the exhibits thereto which
the Company has filed with the Commission under the Securities Act of 1933, as
amended, and to which reference is hereby made for further information.
Each of the Indentures (as defined herein) pursuant to which the Debt
Securities are being issued requires the Company to file reports under the 1934
Act. Quarterly and annual reports will be made available upon request of holders
of the Debt Securities, which annual reports will contain financial information
that has been examined and reported upon by, with an opinion expressed by, an
independent public or certified public accountant.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have heretofore been filed by the Company
with the Commission pursuant to the 1934 Act (File No. 1-3521), are incorporated
by reference in this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997; and
(3) The Company's Current Report on Form 8-K dated December 31, 1996
(filed on January 13, 1997), as amended by the Company's Current
Report on Form 8-K/A (filed on March 14, 1997).
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date of this
Prospectus and prior to the termination of the offering made by this Prospectus
and the accompanying Prospectus Supplement shall be deemed to be incorporated
herein by reference and shall be deemed to be a part hereof from the date of
filing of such documents (such documents, and the documents enumerated above,
being herein referred to as "Incorporated Documents"; provided, however, that
the documents enumerated above and documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the
filing with the Commission of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 shall not be Incorporated Documents or
2
<PAGE> 11
be incorporated by reference in this Prospectus or be a part hereof from and
after the filing of such Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for all purposes to the extent that a statement contained
herein or in any other subsequently filed Incorporated Document or in an
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of such person, a copy of any or all
of the Incorporated Documents, other than exhibits to such documents. Requests
for such copies should be directed to Aristar, Inc., Office of the Chief
Financial Officer, 8900 Grand Oak Circle, Tampa, Florida 33637-1050, telephone
number: (813) 632-4500.
THE COMPANY
The Company, incorporated in Delaware in 1986 as a successor to a company
incorporated in 1927, is a holding company headquartered in Tampa, Florida whose
subsidiaries are engaged in the consumer financial services business. All of the
Company's equity securities are owned indirectly by Great Western Financial
Corporation ("Great Western"). Great Western is the parent of a group of
companies engaged primarily in mortgage lending, retail banking and consumer
financial services. On March 6, 1997, Great Western and Washington Mutual, Inc.
("Washington Mutual"), a financial services company, announced that they had
entered into an Agreement and Plan of Merger providing for the merger of Great
Western with and into a wholly-owned subsidiary of Washington Mutual (the
"Merger"). Subject to the satisfaction or waiver of certain conditions,
including the receipt of necessary shareholder and regulatory approvals, it is
anticipated that the Merger would be consummated in the third quarter of 1997.
Following the Merger, the Company would be an indirect subsidiary of Washington
Mutual.
The operations of the Company consist principally of a network of
approximately 500 branch offices located in 23 states, primarily in the
southeastern United States and in California. These offices generally operate
under the names Blazer Financial Services, City Finance Company and First
Community Financial Services.
The Company makes direct consumer installment loans and purchases retail
installment contracts from local retail establishments. These consumer credit
transactions are primarily for personal, family or household purposes. The
Company also engages in the industrial banking business through subsidiaries in
Colorado and Utah. In addition to making direct consumer installments loans and
purchasing retail installment contracts, these subsidiaries also take customers'
savings deposits. Installment loans written in 1996 had original terms ranging
from 12 to 360 months and averaged 72 months. For the year ended December 31,
1996, 59% of the volume of all installment loans was either unsecured or secured
by guarantors, luxury consumer goods, automobiles or other personal property,
with the remaining 41% being secured by real estate. Retail installment
contracts are generally acquired without recourse to the originating merchant.
These contracts are typically written with original terms from 3 to 60 months
and for 1996 had an average original term of 26 months. The Company calculates
delinquencies on its consumer finance portfolio as the percentage of the gross
amount of accounts which are 60 days or more past due based on the accounts'
original contractual terms. At December 31, 1996, such contractual delinquencies
amounted to 2.5% of gross receivables outstanding.
The principal executive offices of the Company are located at 8900 Grand
Oak Circle, Tampa, Florida 33637-1050. Its telephone number is (813) 632-4500.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the net proceeds
available to the Company from the sale of the Debt Securities will be used to
reduce borrowings of the Company (including outstanding commercial paper) and
for general corporate purposes.
3
<PAGE> 12
The precise amount and timing of sales of the Debt Securities will be
dependent on market conditions and the availability and cost of other funds to
the Company. The Company expects that additional long-term and short-term
financing will be required from time to time. Such financing may be effected
through such means as the Company deems appropriate at the time. The amount and
timing of further financing cannot now be determined.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for each of the periods indicated. Earnings consist of income from
continuing operations before income taxes and, in 1992, before the cumulative
effect of a change in accounting principle, plus fixed charges. Fixed charges
consist of interest and debt expense and an appropriate portion of rentals.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
- ---------------------------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.83 1.90 1.96 1.91 1.80 1.79 1.55
</TABLE>
DESCRIPTION OF DEBT SECURITIES
Senior Debt Securities may be issued from time to time under an Indenture
dated as of October 1, 1997 (the "Senior Indenture") between the Company and
First Union National Bank, as Trustee (the "Senior Trustee"). Subordinated Debt
Securities may be issued from time to time under an Indenture dated as of
October 1, 1997 (the "Subordinated Indenture") between the Company and First
Union National Bank, as Trustee (the "Subordinated Trustee"). The Senior
Indenture and the Subordinated Indenture are sometimes referred to collectively
as the "Indentures" and individually as an "Indenture". The Senior Trustee and
the Subordinated Trustee are sometimes referred to collectively as the
"Trustees" and individually as a "Trustee". The forms of the Indentures are
filed as exhibits to the Registration Statement. Each of the Indentures
incorporates the Company's Standard Multiple-Series Indenture Provisions (the
"Standard Provisions") the form of which is also filed as an exhibit to the
Registration Statement. The following are brief summaries of certain provisions
of each Indenture and are subject to the detailed provisions of such Indenture,
to which reference is hereby made for a complete statement of such provisions.
Capitalized terms used herein and not otherwise defined are used with the
meanings ascribed thereto in the Standard Provisions.
GENERAL
Each Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. The Debt Securities will be
unsecured general obligations of the Company.
Neither Great Western, the Company's ultimate parent, nor any of Great
Western's other subsidiaries have (i) any obligation, direct or otherwise, with
respect to the Debt Securities, (ii) any obligation to maintain the net worth of
the Company or (iii) any agreement with respect to the continuation of the
present ownership of the Company.
The Debt Securities may be issued in fully registered form without coupons
("Registered Securities") or in bearer form with or without coupons ("Bearer
Securities") or in the form of one or more global securities (each a "Global
Security"). Registered Securities which are book-entry securities ("Book-Entry
Securities") will be issued as registered Global Securities. Bearer Securities
may be issued in the form of temporary or definitive Global Securities. Unless
otherwise provided in the Prospectus Supplement, the Debt Securities will be
only Registered Securities. The Debt Securities will be issued, unless otherwise
provided in the Prospectus Supplement, in denominations of $1,000 or an integral
multiple thereof for Registered Securities, and in denominations of $5,000 or an
integral multiple thereof for Bearer Securities.
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<PAGE> 13
The Prospectus Supplement describes the following terms of the Offered
Securities: (1) the title of the Offered Securities; (2) whether the Offered
Securities are Senior Debt Securities or Subordinated Debt Securities; (3) the
percentage of principal amount at which the Offered Securities will be issued;
(4) any limit on the aggregate principal amount of the Offered Securities; (5)
the date or dates on which the Offered Securities will mature and the amount or
amounts of any installment of principal payable on such dates; (6) the rate or
rates (which may be fixed or variable) per annum at which the Offered Securities
will bear interest, if any, or the method of determining such rate or rates and
the date or dates from which such interest, if any, will accrue; (7) the date or
dates on which interest, if any, on the Offered Securities will be payable and
the regular record dates for such payment dates; (8) the terms for redemption,
repurchase or early payment, if any, including any mandatory or optional sinking
fund or analogous provisions; (9) the principal amount of Offered Securities
which bear no interest or interest at a rate which at the time of issuance is
below market rates that is payable upon declaration of acceleration of the
maturity of the Offered Securities; (10) whether the Offered Securities will be
issued in registered form without coupons, in bearer form with or without
coupons, including temporary and definitive global form, or a combination
thereof and the circumstances, if any, upon which such Offered Securities may be
exchanged for Offered Securities issued in a different form; (11) whether the
Offered Securities are to be issued in whole or in part in the form of one or
more Global Securities and, if so, the identity of the depositary for such
Global Security or Securities; (12) whether and under what circumstances the
Company will pay additional amounts to any Holder of Offered Securities who is
not a United States person (as defined under "-- Limitations on Issuance of
Bearer Securities") in respect of any tax, assessment or other governmental
charge required to be withheld or deducted and, if so, whether the Company will
have the option to redeem rather than pay any additional amounts; (13) any
additional covenants for the benefit of the holders of the Offered Securities;
and (14) certain other terms, including the ability of the Company to satisfy
and discharge its obligations under the Indenture with respect to the Offered
Securities.
No service charge will be made for any transfer or exchange of the Debt
Securities but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Debt Securities of a single series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, may be issued at or above par or with an original
issue discount, and may otherwise vary, all as provided in the Indentures.
Federal income tax consequences and other special considerations applicable
to any Debt Securities issued with original issue discount or above par will be
described in the Prospectus Supplement relating thereto.
STATUS OF SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured and unsubordinated general
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Payment of the principal of (and premium, if any) and interest, if any, on
the Subordinated Debt Securities will be subordinate and junior in right of
payment to the prior payment in full of all Senior Debt (as defined herein). At
April 30, 1997, Senior Debt aggregated approximately $1,658,000,000. The
Subordinated Indenture does not limit or restrict the Company's ability to incur
additional Senior Debt, but certain other debt instruments of the Company
contain such limitations.
In the event of any sale pursuant to any judgment or decree in any
proceeding by or on behalf of any Holder, or of any distribution, division or
application of all or any part of the assets of the Company to its creditors by
reason of any liquidation, dissolution or winding up of the Company or
5
<PAGE> 14
any receivership, insolvency, bankruptcy or similar proceeding relative to the
Company or its debts or properties, then the holders of Senior Debt shall be
preferred in the payment of their claims over the holders of the Subordinated
Debt Securities, and such Senior Debt shall be satisfied in full before any
payment or other distribution (other than securities which are subordinate and
junior in right of payment to the payment of all Senior Debt then outstanding)
shall be made upon the Subordinated Debt Securities. In the event that any
Subordinated Debt Security is declared or becomes due and payable before its
maturity because of an occurrence of an event of default (under circumstances
not described in the preceding sentence), no amount shall be paid in respect of
the Subordinated Debt Securities in excess of current interest payments, except
sinking fund payments or at maturity, unless all Senior Debt then outstanding
shall have been paid in full or payments satisfactory to the holders thereof
provided therefor. During the continuance of any default on Senior Debt, no
payments of principal, sinking fund, interest or premium shall be made with
respect to any Subordinated Debt Security if either (i) notice of default has
been given to the Company, provided judicial proceedings are commenced in
respect thereof within 120 days, or (ii) judicial proceedings shall be pending
in respect of such default. In the event that any Subordinated Debt Security is
declared or becomes due and payable before maturity, each holder of Senior Debt
shall be entitled to notice of same and shall be entitled to declare payable on
demand any Senior Debt outstanding to such holder.
"Debt" is defined in the Subordinated Indenture to include all indebtedness
of the Company or any Consolidated Subsidiary representing money borrowed,
except indebtedness owed to the Company by any Consolidated Subsidiary or owed
to any Consolidated Subsidiary by the Company or any other Consolidated
Subsidiary, and includes indebtedness of any other person for money borrowed
when such indebtedness is guaranteed by the Company or any Consolidated
Subsidiary. The term "Debt" shall be deemed to include the liability of the
Company or any Consolidated Subsidiary in respect of any investment or similar
certificate, except to the extent such certificates are pledged by purchasers as
collateral for, and are offset by, receivables. "Senior Debt" is defined to mean
all Debt except Subordinated Debt. "Subordinated Debt" is defined to mean the
Company's 8.875% Senior Subordinated Notes Due 1998, the Company's 7 1/2% Senior
Subordinated Notes Due 1999 and any other Debt which is subordinate and junior
in right of payment to any other Debt by the terms of the instrument creating or
evidencing such Subordinated Debt.
Subordinated Debt Securities will rank on a parity with all other
Subordinated Debt. Subordinated Debt Securities are senior to the Company's
common stock and will be senior to any other class of capital stock which may be
authorized.
EXCHANGE, REGISTRATION AND TRANSFER
Registered Securities (other than Book-Entry Securities) of any series will
be exchangeable for other Registered Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations. In
addition, if Debt Securities of any series are issuable as both Registered
Securities and Bearer Securities, at the option of the Holder and subject to the
terms of the Indenture, Bearer Securities (with all unmatured coupons, except as
provided below, and all matured coupons in default) of such series will be
exchangeable into Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. Bearer
Securities with coupons appertaining thereto surrendered in exchange for
Registered Securities between a Regular Record Date or a Special Record Date and
the relevant date for payment of interest shall be surrendered without the
coupon relating to such date for payment of interest and interest due on such
date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than Book-Entry Securities) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of
6
<PAGE> 15
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in the Prospectus Supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. Such transfer or exchange will
be effected upon the Security Registrar or such transfer agent, as the case may
be, being satisfied with the documents of title and identity of the person
making the request. The Company has appointed the Trustee under each Indenture
as Security Registrar. If a Prospectus Supplement refers to any transfer agents
(in addition to the Security Registrar) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if Debt Securities of a
series are issuable solely as Registered Securities, the Company will be
required to maintain a transfer agent in each Place of Payment for such series
and, if Debt Securities of a series are issuable as Bearer Securities, the
Company will be required to maintain (in addition to the Security Registrar) a
transfer agent in a Place of Payment for such series located in Europe. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities.
In the event of any redemption in part, the Company shall not be required
to: (i) issue, register the transfer of or exchange Debt Securities of any
series during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on (a) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (b) if Debt Securities of the series are issuable only as Bearer Securities,
the day of the first publication of the relevant notice of redemption or, if
Debt Securities of the series are also issuable as Registered Securities and
there is no publication, the day of mailing of the relevant notice of
redemption; (ii) register the transfer of or exchange any Registered Security,
or portion thereof, called for redemption, except the unredeemed portion of any
Registered Security being redeemed in part; or (iii) exchange any Bearer
Security called for redemption, except to exchange such Bearer Security for a
Registered Security of that series and like tenor which is simultaneously
surrendered for redemption.
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities, see "-- Global Securities".
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the Prospectus Supplement, payment of
principal of (and premium, if any) and interest, if any, on Bearer Securities
will be payable in U.S. dollars, subject to any applicable laws and regulations,
at the offices of such Paying Agents outside the United States as the Company
may designate from time to time, and payment of interest on Bearer Securities
with coupons appertaining thereto on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date. No
payment of interest on a Bearer Security will be made unless, on the earlier of
the date of the first such payment by the Company or the delivery by the Company
of the Bearer Security in definitive form, a written certificate in the form
required by the Indenture is provided to the Trustee stating that on such date
the Bearer Security is owned by (i) a person that is not a United States person,
(ii) a United States person that (a) is a foreign branch of a United States
financial institution purchasing for its own account or for resale or (b)
acquired and holds the Bearer Security through the foreign branch of a United
States financial institution (and, in the case of either (a) or (b), such
financial institution agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder) or (iii) a financial institution
purchasing for resale during the restricted period (as defined under "-- Global
Securities -- Temporary and Definitive Global Securities") and, in any case, if
any such owner is a financial institution, such financial institution has not
acquired the Bearer Security for purposes of resale to United States persons or
to persons within the United States (as defined under "-- Limitations on
Issuance of Bearer Securities"). Presentation of coupons for payment or other
demands for payment of Bearer Securities must be made outside the United States,
and no payment with respect to any Bearer Security will be made at any office or
agency of the Company in the United States or by check mailed
7
<PAGE> 16
to any address in the United States or by transfer to an account maintained with
a bank located in the United States. Notwithstanding the foregoing, payments of
principal of (and premium, if any) and interest, if any, on Bearer Securities
will be made at the office of the Company's Paying Agent in The City of New
York, if (but only if) (i) despite the appointment of Paying Agents outside the
United States, payment of the full amount thereof at the offices of all such
Paying Agents is illegal or effectively precluded by exchange controls or other
similar restrictions, (ii) such payment is then permitted by applicable laws and
(iii) in appointing a Paying Agent in The City of New York, the Company would
not suffer any fiscal or other sanction under applicable laws as a result of
such appointment or of any payment being made through such Paying Agent.
Unless otherwise provided in the Prospectus Supplement, payment of
principal of (and premium, if any) and interest, if any, on Registered
Securities will be made in U.S. dollars at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register. Unless otherwise provided in the Prospectus Supplement,
payment of any installment of interest on Registered Securities will be made to
the Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest.
Unless otherwise provided in the Prospectus Supplement, the Corporate Trust
Office of each Trustee in The City of New York will be designated as the
Company's sole Paying Agent for payments with respect to Offered Securities that
are issuable solely as Registered Securities and as the Company's Paying Agent
in The City of New York for payments with respect to Offered Securities (subject
to the limitations described above in the case of Bearer Securities) that are
issuable solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Offered
Securities will be named in the Prospectus Supplement. The Company may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Debt Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in The City of New York for payments with respect to any Registered
Securities of the series (and for payments with respect to Bearer Securities of
the series in the circumstances described above, but not otherwise), and (ii) a
Paying Agent in a Place of Payment located outside the United States where Debt
Securities of such series and any coupons appertaining thereto may be presented
and surrendered for payment; provided that if the Debt Securities of such series
are listed on The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent in London or Luxembourg or any
other required city located outside the United States, as the case may be, for
the Debt Securities of such series.
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) or interest, if any, on any Debt Security or
coupon that remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to the
Company and the Holder of such Debt Security or coupon will thereafter look only
to the Company for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part as one or
more Global Securities that will be deposited with, or on behalf of, a
depositary located in the United States (a "U.S. Depositary") or a common
depositary located outside the United States (a "Common Depositary") identified
in the Prospectus Supplement relating to such series. Global Securities may be
issued in either registered or bearer form, and in either temporary or
definitive form.
8
<PAGE> 17
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will apply
to all depositary arrangements with a U.S. Depositary or Common Depositary.
Book-Entry Securities
Unless otherwise specified in the Prospectus Supplement, Debt Securities
which are to be represented by a Global Security to be deposited with or on
behalf of a U.S. Depositary will be represented by a Global Security registered
in the name of such depositary or its nominee. Upon the issuance of a Global
Security in registered form, the U.S. Depositary for such Global Security will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of institutions that have accounts with such depositary or its
nominee ("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Securities will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interests
in such Global Securities will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the U.S. Depositary or its
nominee for such Global Security or by participants or persons that hold through
participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the U.S. Depositary for a Global Security in registered form, or
its nominee, is the registered owner of such Global Security, such depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Security for all purposes under
the Indenture governing such Debt Securities. Except as set forth below, owners
of beneficial interests in such Global Securities will not be entitled to have
Debt Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture including, without limitation, for
purposes of consenting to any amendment thereof or supplement thereto.
Payment of principal of (and premium, if any) and interest, if any, on Debt
Securities registered in the name of or held by a U.S. Depositary or its nominee
will be made to the U.S. Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Security representing such Debt
Securities. None of the Company, the Trustee, any Paying Agent or the Security
Registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the U.S. Depositary for Debt Securities of a
series, upon receipt of any payment of principal of (and premium, if any) or
interest on permanent Global Securities, will credit participants' accounts on
the date such payment is payable in accordance with their respective beneficial
interests in the principal amount of such Global Securities as shown on the
records of such Depositary. The Company also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name", and will be the
responsibility of such participants.
Unless and until it is exchanged in whole for Debt Securities in definitive
form, a Global Security may not be transferred except as a whole by the U.S.
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another
9
<PAGE> 18
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor. If a U.S.
Depositary for Debt Securities in registered form is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
the Company within ninety days, the Company will issue Debt Securities in
definitive registered form in exchange for the Global Security or Securities
representing such Debt Securities. In addition, the Company may at any time and
in its sole discretion determine not to have any Debt Securities in registered
form represented by one or more Global Securities and, in such event, will issue
Debt Securities in definitive registered form in exchange for the Global
Security or Securities representing such Debt Securities. In any such instance,
an owner of a beneficial interest in a Global Security will be entitled to
physical delivery in definitive form of Debt Securities of the series
represented by such Global Security equal in principal amount to such beneficial
interest and to have such Debt Securities registered in the name of the owner of
such beneficial interest.
Temporary and Definitive Global Securities
If so specified in the Prospectus Supplement, all or any portion of the
Debt Securities of a series that are issuable as Bearer Securities initially
will be represented by one or more temporary Global Securities, without interest
coupons, to be deposited with a Common Depositary in London for Morgan Guaranty
Trust Company of New York, Brussels Office, as operator of the Euro-clear System
("Euro-clear") and CEDEL S.A. ("CEDEL") for credit to the respective accounts of
the beneficial owners of such Debt Securities (or to such other accounts as they
may direct). On and after the exchange date determined as provided in any such
temporary Global Security and described in the Prospectus Supplement, each such
temporary Global Security will be exchangeable for definitive Debt Securities in
bearer form, registered form, definitive global bearer form or any combination
thereof, as specified in the Prospectus Supplement, upon written certification
(as described under "-- Payment and Paying Agents") of non-United States
beneficial ownership. No Bearer Security delivered in exchange for a portion of
a temporary Global Security shall be mailed or otherwise delivered to any
location in the United States.
Unless otherwise provided in the Prospectus Supplement, interest in respect
of any portion of a temporary Global Security payable in respect of an Interest
Payment Date occurring prior to the issuance of definitive Debt Securities will
be paid to each of Euro-clear and CEDEL with respect to the portion of the
temporary Global Security held for its account upon delivery to the Trustee of a
certificate of non-United States beneficial ownership signed by Euro-clear or
CEDEL, as the case may be, in the form required by the applicable Indenture
dated no earlier than such Interest Payment Date.
If any Debt Securities of a series are issuable in definitive global bearer
form, the Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such definitive Global Security may
exchange such interests for Debt Securities of such series and of like tenor and
principal amount in any authorized form and denomination. No Bearer Security
delivered in exchange for a portion of a definitive Global Security shall be
mailed or otherwise delivered to any location in the United States in connection
with such exchange. A Person having a beneficial interest in a definitive Global
Security, except with respect to payment of principal of (and premium, if any)
and interest, if any, on such definitive Global Security, will be treated as a
Holder of such principal amount of Outstanding Debt Securities represented by
such definitive Global Security as shall be specified in a written statement of
the Holder of such definitive Global Security or, in the case of a definitive
Global Security in bearer form, of Euro-clear or CEDEL which is produced to the
Trustee by such Person. Principal of (and premium, if any) and interest, if any,
on a definitive Global Security will be payable in the manner described in the
Prospectus Supplement.
In connection with the sale of a Bearer Security during the "restricted
period," as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States
Treasury regulations (generally, the first 40 days after the closing date and,
with respect to unsold allotments, until sold), no Bearer Security (including a
definitive Bearer Security in global form) shall be mailed or otherwise
delivered to any location in the United States and a Bearer Security sold during
the restricted period may be
10
<PAGE> 19
delivered only if the person entitled to receive such Bearer Security (including
a definitive Bearer Security in global form) furnishes written certification (as
described under "-- Payment and Paying Agents") of non-United States beneficial
ownership. See "-- Limitations on Issuance of Bearer Securities".
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
Generally, in compliance with United States federal tax laws and
regulations, Bearer Securities may not be offered or sold during the restricted
period (as defined under "-- Global Securities -- Temporary and Definitive
Global Securities") or delivered in connection with their sale during the
restricted period in the United States or to United States persons (each as
defined below) other than foreign branches of United States financial
institutions that agree in writing to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code or that purchase for resale during the
restricted period only to non-United States persons outside the United States.
Any underwriters, agents and dealers participating in the offering of Debt
Securities must agree that they will not offer or sell any Bearer Securities in
the United States or to United States persons (other than the financial
institutions described above) or deliver Bearer Securities within the United
States.
Bearer Securities and their interest coupons will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code". The Code Sections referred to in the legend provide
that, with certain exceptions, a United States person holding a Bearer Security
or coupon will not be permitted to deduct any loss, and will not be eligible for
capital gain treatment with respect to any gain, realized on a sale, exchange or
redemption of such Bearer Security or coupon.
As used in this Prospectus, "United States person" means (i) an individual
citizen or resident of the United States, (ii) a corporation or partnership
organized in or under the laws of the United States or any state thereof or the
District of Columbia, (iii) an estate or trust the income of which is subject to
United States federal income taxation regardless of its source or (iv) a trust
the administration of which is subject to the primary supervision of a court
within the United States and for which one or more United States fiduciaries
have the authority to control all substantial decisions and the term "United
States" means the United States of America (including the States and the
District of Columbia), its territories, its possessions, the Commonwealth of
Puerto Rico and other areas subject to its jurisdiction.
ABSENCE OF RESTRICTIVE COVENANTS
The Company is not restricted by either of the Indentures from paying
dividends or from incurring, assuming or becoming liable for any type of debt or
other obligations or from creating liens on its property for any purpose.
Neither of the Indentures requires the maintenance of any financial ratios or
specified levels of net worth or liquidity. Neither of the Indentures contains
provisions which afford holders of the Debt Securities protection in the event
of a highly leveraged transaction involving the Company.
MERGER AND CONSOLIDATION
Each Indenture provides that the Company, without the consent of the
Holders of any of the Outstanding Debt Securities, may consolidate with or merge
into any other corporation or transfer or lease its properties and assets
substantially as an entirety to any Person or may permit any corporation to
merge into the Company, provided that: (i) the successor is a corporation
organized under the laws of any domestic jurisdiction; (ii) the successor, if
other than the Company, assumes the Company's obligations under such Indenture
and the Debt Securities issued thereunder; (iii) immediately after giving effect
to such transaction, no Event of Default and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred and
be continuing; and (iv) certain other conditions are met.
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<PAGE> 20
Each Indenture provides that, upon any consolidation or merger or transfer
or lease of the properties and assets of the Company substantially as an
entirety in accordance with the preceding paragraph, the successor corporation
formed by such consolidation or into which the Company is merged or to which
such transfer or lease is made shall be substituted for the Company with the
same effect as if such successor corporation had been named as the Company.
Thereafter, the Company shall be relieved of the performance and observance of
all obligations and covenants of such Indenture and the Senior Debt Securities
or Subordinated Debt Securities, as the case may be, including but not limited
to the obligation to make payment of the principal of (and premium, if any) and
interest, if any, on all the Debt Securities then outstanding, and the Company
may thereupon or any time thereafter be liquidated and dissolved.
SATISFACTION AND DISCHARGE
Unless the Prospectus Supplement provides otherwise, the Company will be
discharged from its obligations under the Outstanding Debt Securities of a
series upon satisfaction of the following conditions: (a) the Company has
irrevocably deposited with the Trustee either (i) money in an amount as will, or
(ii) U.S. Government Obligations as will, together with the predetermined and
certain income to accrue thereon without consideration of any reinvestment
thereof, or (iii) a combination of (i) and (ii) as will (in a written opinion
with respect to (ii) or (iii) of independent public accountants delivered to the
Trustee), be sufficient to pay and discharge the entire principal of (and
premium, if any), and interest, if any, to Stated Maturity or any redemption
date on, the Outstanding Debt Securities of such series; (b) the Company has
paid or caused to be paid all other sums payable with respect to the Outstanding
Debt Securities of such series; (c) the Trustee has received an Officers'
Certificate and an Opinion of Counsel each stating that all conditions precedent
have been complied with; and (d) the Trustee has received (i) a ruling directed
to the Company and the Trustee from the United States Internal Revenue Service
to the effect that the Holders of the Debt Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result of
the Company's exercise of its option to discharge its obligations under the
Indenture with respect to such series and will be subject to Federal income tax
on the same amount and in the same manner and at the same times as would have
been the case if such deposit and discharge had not occurred or (ii) an opinion
of tax counsel to the same effect as the ruling described in clause (i) above
and based upon a change in law. Upon such discharge, the Company will be deemed
to have satisfied all the obligations under the Indenture, except for
obligations with respect to registration of transfer and exchange of the Debt
Securities of such series, and the rights of the Holders to receive from
deposited funds payment of the principal of (and premium, if any) and interest,
if any, on the Debt Securities of such series.
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee thereunder may,
without the consent of any Holders of Debt Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding any additional Events of Default, establishing the form or
terms of Debt Securities or curing ambiguities or inconsistencies in such
Indenture or making other provisions; provided such action shall not adversely
affect the interests of the Holders of any series of Debt Securities in any
material respect.
Each Indenture contains provisions permitting the Company, with the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of all affected series (acting as one class), to
execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of such Indenture or modifying the rights of
the Holders of the Debt Securities of such series, except that no such
supplemental indenture may, without the consent of the Holders of all the
Outstanding Debt Securities affected thereby, among other things: (i) change the
maturity of the principal of, or any installment of principal of or interest on,
any of the Debt Securities; (ii) reduce the principal amount thereof (or any
premium thereon) or the rate of interest, if any, thereon; (iii) reduce the
amount of the principal of Original Issue Discount Securities payable
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<PAGE> 21
on any acceleration of maturity; (iv) change any obligation of the Company to
maintain an office or agency in the places and for the purposes required by such
Indenture; (v) impair the right to institute suit for the enforcement of any
such payment on or after the applicable maturity date; (vi) reduce the
percentage in principal amount of the Outstanding Debt Securities of any series,
the consent of the Holders of which is required for any such supplemental
indenture or for any waiver of compliance with certain provisions of, or of
certain defaults under, such Indenture; or (vii) with certain exceptions, to
modify the provisions for the waiver of certain defaults and any of the
foregoing provisions.
EVENTS OF DEFAULT
An Event of Default in respect of any series of Debt Securities (unless it
is either inapplicable to a particular series or has been modified or deleted
with respect to any particular series) is defined in each Indenture to be: (i) a
default for 30 days in the payment when due of any interest on such series of
Debt Securities; (ii) a default in the payment of principal of (and premium, if
any, on) such series of Debt Securities, whether payable at maturity, by call
for redemption, pursuant to any sinking fund or otherwise; (iii) a default for
90 days after a notice of default with respect to the performance of any other
covenant in such Indenture (other than a covenant included in such Indenture
solely for the benefit of a series of Debt Securities other than that series);
(iv) certain events of bankruptcy, insolvency or reorganization; (v) an event of
default under any mortgage, indenture (including such Indenture) or other
instrument under which any Debt shall be outstanding which default shall have
resulted in the acceleration of such Debt in excess of $25,000,000 in aggregate
principal amount (except that such amount shall be $20,000,000 in respect of a
default on Debt Securities of another series) and such acceleration shall not
have been rescinded or such Debt discharged within a period of 30 days after
notice; and (vi) any other event of default provided for such series of Debt
Securities.
Each Indenture provides that if an Event of Default specified therein in
respect of any series of Outstanding Debt Securities issued under such Indenture
shall have happened and be continuing, either the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series may declare the principal (or, if such Debt Securities
are Original Issue Discount Securities, such portion of the principal amount as
may be specified by the terms of such Debt Securities) of all of the Outstanding
Debt Securities of such series to be immediately due and payable.
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee thereunder, or exercising any trust or power conferred on such
Trustee, with respect to the Debt Securities of such series; provided that (i)
such direction shall not be in conflict with any rule of law or with the
Indenture, (ii) the Trustee may take any other action deemed proper that is not
inconsistent with such direction and (iii) the Trustee shall not determine that
the action so directed would be unjustly prejudicial to the Holders of Debt
Securities of such series not taking part in such direction.
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series may on behalf
of the Holders of all of the Outstanding Debt Securities of such series waive
any past default under the applicable Indenture with respect to such series and
its consequences, except a default (i) in the payment of the principal of (or
premium, if any) or interest, if any, on any of the Debt Securities of such
series or (ii) in respect of a covenant or provision of such Indenture which,
under the terms of such Indenture, cannot be modified or amended without the
consent of the Holders of all of the Outstanding Debt Securities of such series
affected thereby.
Each Indenture contains provisions entitling the Trustee thereunder,
subject to the duty of such Trustee during an Event of Default in respect of any
series of Debt Securities to act with the required standard of care, to be
indemnified by the Holders of the Debt Securities of such series before
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<PAGE> 22
proceeding to exercise any right or power under such Indenture at the request of
the Holders of the Debt Securities of such series.
Each Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default in respect of any series of Debt Securities,
give to the Holders of the Debt Securities of such series notice of all uncured
and unwaived defaults known to it; provided, however, that, except in the case
of a default in the payment of the principal of (or premium, if any) or any
interest on, or any sinking fund installment with respect to, any of the Debt
Securities of such series, such Trustee will be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interests of the Holders of the Debt Securities of such series; and
provided, further, that such notice shall not be given until at least 30 days
after the occurrence of an Event of Default regarding the performance of any
covenant of the Company under such Indenture other than for the payment of the
principal of (or premium, if any) or any interest on, or any sinking fund
installment with respect to, any of the Debt Securities of such series. The term
default for the purpose of this provision only means any event that is, or after
notice or lapse of time, or both, would become, an Event of Default with respect
to the Debt Securities of such series.
The Company will be required to furnish annually to each Trustee a
certificate as to compliance with all conditions and covenants under each of the
Indentures.
MEETINGS
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series if Debt Securities of that series are issuable as
Bearer Securities. A meeting may be called at any time by the Trustee under the
applicable Indenture, and also, upon request, by the Company or the Holders of
at least 10% in principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given in accordance with "-- Notices"
below. Persons entitled to vote a majority in principal amount of the
Outstanding Debt Securities of a series shall constitute a quorum at a meeting
of Holders of Debt Securities of such series, except that in the absence of a
quorum, a meeting called by the Company or the Trustee shall be adjourned for a
period of not less than 10 days, and in the absence of a quorum at any such
adjourned meeting, the meeting shall be further adjourned for a period of not
less than 10 days, at which further adjourned meeting persons entitled to vote
25% in aggregate principal amount of the Outstanding Debt Securities of such
series shall constitute a quorum. Except for any consent which must be given by
the Holder of each Outstanding Debt Security affected thereby, as described
above under "-- Modification of the Indentures", and subject to the provisions
described in the last sentence under this subheading, any resolution presented
at a meeting or adjourned meeting duly reconvened at which a quorum is present
may be adopted by the affirmative vote of the lesser of (i) the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series
and (ii) 66 2/3% in aggregate principal amount of Outstanding Debt Securities of
such series represented and voting at the meeting; provided, however, that any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of Outstanding Debt Securities of a series may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the lesser of (i) the Holders of such specified percentage
in principal amount of the Outstanding Debt Securities of that series and (ii) a
majority in principal amount of Outstanding Debt Securities of such series
represented and voting at the meeting. Any resolution passed or decision taken
at any meeting of Holders of Debt Securities of any series duly held in
accordance with the applicable Indenture will be binding on all Holders of Debt
Securities of that series and the related coupons. With respect to any consent,
waiver or other action which the applicable Indenture expressly provides may be
given by the Holders of a specified percentage of Outstanding Debt Securities of
all series affected thereby (acting as one class), only the principal amount of
Outstanding Debt Securities of any series represented at a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid and voting in
favor of
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<PAGE> 23
such action shall be counted for purposes of calculating the aggregate principal
amount of Outstanding Debt Securities of all series affected thereby favoring
such action.
NOTICES
Except as otherwise provided in each Indenture, notices to Holders of
Bearer Securities will be given by publication at least once in a daily
newspaper in The City of New York and London and in such other city or cities as
may be specified in such Bearer Securities and will be mailed to such Persons
whose names and addresses were previously filed with the Trustee under the
applicable Indenture, within the time prescribed for the giving of such notice.
Notices to Holders of Registered Securities will be given by mail to the
addresses of such Holders as they appear in the Security Register.
TITLE
Title to any Bearer Securities and any coupons appertaining thereto will
pass by delivery. The Company, the appropriate Trustee and any agent of the
Company or such Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon and the registered owner of any Registered Security
(including Registered Securities in global registered form) as the absolute
owner thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes.
REGARDING THE TRUSTEES
Senior Trustee
The Company has a credit facility with the Senior Trustee.
Subordinated Trustee
The Company has a credit facility with the Subordinated Trustee.
PLAN OF DISTRIBUTION
The Company may sell all or part of the Debt Securities to or through one
or more underwriters for public offering and sale by them, and also may sell
Debt Securities directly to investors or through one or more agents.
Any particular series of Debt Securities may be acquired by such
underwriter(s) for their own account and may be resold from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. In
connection with the sale of Debt Securities, underwriters, dealers and agents
may receive compensation from the Company or from purchasers of Debt Securities
in the form of discounts, concessions or commissions. Underwriters, dealers and
agents who participate in the distribution of Debt Securities may be deemed to
be underwriters, and any discounts or commissions received by them from the
Company and any profit on the resale of Debt Securities by them may be deemed to
be underwriting discounts and commissions under the Securities Act of 1933, as
amended. Any such underwriter, dealer or agent will be identified, and any such
compensation received from the Company will be described, in the Prospectus
Supplement. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by the Company against certain liabilities,
including certain liabilities under the Securities Act of 1933, as amended.
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$150,000,000
ARISTAR LOGO
ARISTAR, INC.
6.00% SENIOR NOTES DUE MAY 15, 2002
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PROSPECTUS SUPPLEMENT
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NATIONSBANC MONTGOMERY SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
FIRST UNION CAPITAL MARKETS CORP.
NESBITT BURNS SECURITIES INC.
MAY 12, 1999
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