<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration Number 333-80147
THIS PROSPECTUS SUPPLEMENT RELATES TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, BUT IS NOT COMPLETE AND MAY BE CHANGED.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED JUNE , 2000
PRELIMINARY PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 22, 1999
$
Washington Mutual Logo
(formerly ARISTAR, INC.)
% Senior Notes due , 20
------------------
We will pay interest on the Notes each June and December . The first
interest payment will be made on December , 2000. We may not redeem the Notes
prior to their maturity on , 20 . There is no sinking fund for the
Notes.
<TABLE>
<CAPTION>
PROCEEDS TO
WASHINGTON
UNDERWRITING MUTUAL
PRICE TO DISCOUNTS AND FINANCE
PUBLIC (1) COMMISSIONS CORPORATION
----------------- ----------------- -----------------
<S> <C> <C> <C>
Per Note..................................... % % %
Total........................................ $ $ $
</TABLE>
(1) Plus accrued interest, if any, from June , 2000.
Delivery of the Notes in book-entry form only, will be made on or about
June , 2000.
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
CHASE SECURITIES INC.
SALOMON SMITH BARNEY
The date of this prospectus supplement is June , 2000.
<PAGE> 2
------------------
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
ABOUT THIS PROSPECTUS SUPPLEMENT...... S-2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE........................... S-2
THE COMPANY........................... S-2
USE OF PROCEEDS....................... S-4
CERTAIN TERMS OF THE NOTES............ S-4
SUMMARY FINANCIAL INFORMATION......... S-6
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
WASHINGTON MUTUAL FINANCE
CORPORATION......................... 4
USE OF PROCEEDS....................... 5
RATIO OF EARNINGS TO FIXED CHARGES.... 5
DESCRIPTION OF DEBT SECURITIES........ 5
PLAN OF DISTRIBUTION.................. 20
LEGAL OPINIONS........................ 21
EXPERTS............................... 21
</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 % Senior Notes due
, 20 and the prospectus contains information about our senior debt
generally. This prospectus supplement may add, update or change information in
the prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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.
- Our Annual Report to Shareholders on Form 10-K for the fiscal year ended
December 31, 1999.
- Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
- Our Current Report on Form 8-K dated March 2, 2000.
THE COMPANY
Washington Mutual Finance Corporation (formerly known as 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 operate through a network of approximately 540 branch offices in 25
states, primarily in the Southeast, Southwest 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. Beginning in November
1999 and continuing throughout the first half of 2000, the office names are
being changed to Washington Mutual Finance.
S-2
<PAGE> 3
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 our consumer loans consists of households with an annual
income of up to $70,000. 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, 1999 and 1998, the average
balance of a personal loan was approximately $2,250 and $2,100, respectively.
Consumer loans written in 1999 had original terms ranging from 3 to 360 months
and averaged 71 months. As of December 31, 1999, 43.6% of our total portfolio
was either unsecured or secured by automobiles or other personal property
("personal loans") and 46.8% of our total portfolio was secured by real estate.
In 1998, these loan types comprised 45.1% and 43.6% of the portfolio,
respectively.
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; We had such arrangements with over
3,000 merchants at December 31, 1999. Retail sales contracts comprised 9.6% of
our portfolio in 1999 and 11.3% of our portfolio in 1998. At December 31, 1999
and 1998, the average balance of retail sales contracts was approximately $825
and $800, respectively.
S-3
<PAGE> 4
USE OF PROCEEDS
We will apply the proceeds from the sale of the Notes to repay all or a
portion of our outstanding commercial paper, to pay at maturity our 6.30% Senior
Notes due July 15, 2000 in the aggregate principal amount of $100 million, and
for general corporate purposes. The outstanding balance of our commercial paper
fluctuates on a daily basis. For the 13 weeks ended March 31, 2000, the
outstanding balance of our commercial paper ranged from approximately $250
million to $475 million, and interest rates ranged from 5.5% to 7.0%. The
proceeds from our commercial paper program are used for general corporate
purposes.
CERTAIN TERMS OF THE NOTES
GENERAL
The Notes will mature on , 20 . An Officer's Certificate
sets forth the terms of the Notes in accordance with the Senior Indenture, dated
as of June , 2000, between Washington Mutual Finance and the Bank of New York,
as successor to Harris National Bank (formerly known as 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 our senior debt securities, including the Notes, under the
Senior Indenture. At June , 2000, our unsecured senior debt aggregated
approximately $ billion.
We 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 such 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 , 2000 at the annual rate of %.
We will pay interest semiannually on each June and December , beginning on
December , 2000, to the person in whose name the Notes are registered at the
close of business on the or prior to the payment date.
Interest on the Notes will be paid on the basis of a 360-day year comprised of
twelve 30-day months.
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.
S-4
<PAGE> 5
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 (the "Exchange Act"). 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 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.
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-5
<PAGE> 6
SUMMARY FINANCIAL INFORMATION
We have derived selected financial data presented in this table for, and as
of the end of, each of the three years in the three-year period ended December
31, 1999 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, 2000 and 1999 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, 2000 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 this prospectus
supplement and the prospectus under the sections entitled "Incorporation of
Certain Documents by Reference."
INCOME STATEMENT DATA
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------ -------------------
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Loan interest and fee income.......... $365,719 $404,954 $464,179 $110,694 $126,852
Investment securities income.......... 10,373 11,449 10,825 2,498 2,784
-------- -------- -------- -------- --------
Total interest income............... 376,092 416,403 475,004 113,192 129,636
Interest and debt expense............. 128,887 133,211 149,609 34,804 43,541
-------- -------- -------- -------- --------
Net interest income before provision
for credit losses................... 247,205 283,192 325,395 78,388 86,095
Provision for credit losses........... 66,600 79,760 100,590 25,600 24,477
-------- -------- -------- -------- --------
Net interest income................. 180,605 230,432 224,805 52,788 61,618
Other income.......................... 26,555 27,147 29,501 6,655 7,872
Other expenses
Personnel expenses.................. 69,468 76,664 78,259 19,156 22,985
Other operating expenses............ 61,661 66,328 57,335 15,491 15,311
-------- -------- -------- -------- --------
131,129 142,992 135,594 34,647 38,296
-------- -------- -------- -------- --------
Income before income taxes............ 76,031 87,587 118,712 24,796 31,194
Provision for federal and state income
taxes (1)........................... 29,744 34,700 45,720 9,670 11,850
-------- -------- -------- -------- --------
Net income............................ $ 46,287 $ 52,887 $ 72,992 $ 15,126 $ 19,344
======== ======== ======== ======== ========
Ratio of earnings to fixed charges
(2)................................. 1.57 1.64 1.77 1.69 1.70
</TABLE>
---------------
(1) 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.
(2) 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
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
1998 -----------
------------------------ (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Finance receivables, net............................... $2,493,903 $2,961,449 $3,195,227
Investment securities.................................. 150,820 128,964 165,513
Cash and cash equivalents.............................. 24,180 40,008 2,349
Other assets........................................... 75,807 97,136 97,804
---------- ---------- ----------
Total assets................................. $2,744,710 $3,227,557 $3,460,893
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Short-term debt...................................... $ 560,823 $ 284,175 $ 520,920
Long-term debt....................................... 1,427,167 2,069,788 2,070,075
---------- ---------- ----------
Total debt................................... 1,987,990 2,353,963 2,590,995
Customer deposits.................................... 187,518 189,934 176,884
Accounts payable and other liabilities............... 149,872 208,502 190,854
---------- ---------- ----------
Total liabilities............................ 2,325,380 2,752,399 2,958,733
Total stockholder's equity............................. 419,330 475,158 502,160
---------- ---------- ----------
Total liabilities and stockholder's equity... $2,744,710 $3,227,557 $3,460,893
========== ========== ==========
</TABLE>
S-7
<PAGE> 8
UNDERWRITING
Under the terms of, and subject to the conditions contained in, an
underwriting agreement dated June , 2000, we have agreed to sell to the
underwriters named below the following respective principal amount of Notes:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF NOTES
UNDERWRITERS ----------------
<S> <C>
Credit Suisse First Boston Corporation ..................... $
Chase Securities Inc........................................
Salomon Smith Barney Inc....................................
------------
Total..................................................... $
============
</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 % of the principal amount per
Note. The underwriters and selling group members may allow a discount of %
of the principal amount per Note on sales to other broker/dealers. After the
initial public offering, the public offering price, concession and discount to
broker/dealers may be changed.
We estimate that our out of pocket expenses for this offering will be
approximately $ .
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 underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids in accordance with Regulation M
under 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.
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 judgment 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 Notes 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 LLP, 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 , 2000, Heller Ehrman White & McAuliffe LLP and
individual attorneys at the firm who participated in this transaction owned an
aggregate of shares of the common stock of Washington Mutual, our
ultimate parent.
EXPERTS
We have incorporated in the prospectus supplement our consolidated
financial statements as of December 31, 1999 and 1998, and for each of the years
in the three-year period ended December 31, 1999 by reference to our Annual
Report on Form 10-K for the year ended December 31, 1999 in reliance upon the
report of Deloitte & Touche, LLP, independent auditors, as of and for the years
ended December 31, 1999, 1998 and 1997, given on the authority of that firm as
experts in auditing and accounting.
S-10
<PAGE> 11
PROSPECTUS
$1,000,000,000
WASHINGTON MUTUAL LOGO
(formerly ARISTAR, INC.)
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 Washington Mutual Finance Corporation 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.
2
<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.
3
<PAGE> 14
WASHINGTON MUTUAL FINANCE CORPORATION
Washington Mutual Finance Corporation (formerly known as Aristar, Inc.) is
a holding company headquartered in Tampa, Florida whose subsidiaries are engaged
in the consumer financial services business. Washington Mutual Finance 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 Washington Mutual Finance'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, 45.1% of Washington Mutual Finance'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; Washington Mutual Finance 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 Washington Mutual Finance'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.
Washington Mutual Finance 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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<PAGE> 15
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,
Washington Mutual Finance 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 Washington Mutual Finance'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
Washington Mutual Finance 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
Washington Mutual Finance 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 Washington Mutual Finance 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 Washington Mutual Finance 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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<PAGE> 16
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
Washington Mutual Finance 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 Washington Mutual Finance or its subsidiaries.
Unless otherwise provided in a prospectus supplement, the senior debt
securities will be unsecured obligations of Washington Mutual Finance and will
rank on a parity with all other unsecured and unsubordinated indebtedness of
Washington Mutual Finance. The subordinated debt securities will be unsecured
obligations of Washington Mutual Finance, subordinated in right of payment to
the prior payment in full of all Senior Indebtedness (which term includes senior
debt securities) of Washington Mutual Finance as described below under
"Subordination of Subordinated Debt Securities" and in the applicable prospectus
supplement.
Neither Washington Mutual, Washington Mutual Finance'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 Washington Mutual Finance or (iii) any agreement with respect
to the continuation of the present ownership of the Washington Mutual Finance.
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;
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<PAGE> 17
(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 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 Washington Mutual Finance
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 Washington
Mutual Finance 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 Washington Mutual
Finance 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 Washington Mutual Finance 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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<PAGE> 18
STATUS OF SENIOR DEBT SECURITIES
The senior debt securities will be unsecured and unsubordinated general
obligations of Washington Mutual Finance and will rank on a parity with all
other unsecured and unsubordinated indebtedness of Washington Mutual Finance.
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 Washington Mutual Finance's assets to our
creditors by reason of any liquidation, dissolution or winding up of Washington
Mutual Finance or any receivership, insolvency, bankruptcy or similar proceeding
relative to Washington Mutual Finance 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 Washington Mutual Finance, 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
Washington Mutual Finance or any Consolidated Subsidiary representing money
borrowed, except indebtedness owed to Washington Mutual Finance by any
Consolidated Subsidiary or owed to any Consolidated Subsidiary by Washington
Mutual Finance or any other Consolidated Subsidiary, and includes indebtedness
of any other person for money borrowed when such indebtedness is guaranteed by
Washington Mutual Finance or any Consolidated Subsidiary. The term "Debt" shall
be deemed to include the liability of Washington Mutual Finance 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 Washington
Mutual Finance's 7 1/2% Senior
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<PAGE> 19
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 Washington Mutual
Finance'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 Washington Mutual Finance 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. Washington Mutual Finance 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 Washington Mutual Finance with respect to any series of debt securities,
Washington Mutual Finance 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, Washington Mutual Finance 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, Washington Mutual
Finance 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.
Washington Mutual Finance may at any time designate additional transfer agents
with respect to any series of debt securities.
In the event of any redemption in part, Washington Mutual Finance 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
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<PAGE> 20
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 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 Washington Mutual
Finance 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 Washington Mutual Finance or
the delivery by Washington Mutual Finance 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 Washington Mutual Finance 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
Washington Mutual Finance'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, Washington Mutual Finance
would not suffer any fiscal or other sanction under
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<PAGE> 21
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 Washington Mutual Finance may designate from time to time,
except that at the option of Washington Mutual Finance 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 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 Washington
Mutual Finance'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 Washington Mutual Finance'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 Washington Mutual Finance
for the Offered Securities will be named in a prospectus supplement. Washington
Mutual Finance 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, Washington Mutual Finance 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, Washington Mutual
Finance 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, Washington
Mutual Finance 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 Washington Mutual Finance 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 Washington Mutual Finance and the Holder of such Debt Security or coupon will
thereafter look only to Washington Mutual Finance for payment thereof.
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<PAGE> 22
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. Washington Mutual Finance 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 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 Washington Mutual Finance,
if such debt securities are offered and sold directly by Washington Mutual
Finance. 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 Washington Mutual Finance, 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
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<PAGE> 23
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.
Washington Mutual Finance 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. Washington Mutual Finance
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 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 Washington Mutual
Finance within ninety days, Washington Mutual Finance will issue debt securities
in definitive registered form in exchange for the Global Security or Securities
representing such debt securities. In addition, Washington Mutual Finance 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.
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<PAGE> 24
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 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.
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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
Washington Mutual Finance 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 Washington Mutual Finance.
MERGER AND CONSOLIDATION
Each Indenture provides that Washington Mutual Finance, 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 Washington Mutual Finance, provided that: (i) the successor is a
corporation organized under the laws of any domestic jurisdiction; (ii) the
successor, if other than Washington Mutual Finance, assumes Washington Mutual
Finance'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 Washington Mutual Finance substantially
as an entirety in accordance with the preceding paragraph, the successor
corporation formed by such consolidation or into which Washington Mutual Finance
is merged or to which such transfer or lease is made shall be substituted for
Washington Mutual Finance with the same effect as if such successor corporation
had been named as Washington Mutual Finance. Thereafter, Washington Mutual
Finance shall be relieved of the performance and
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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 Washington Mutual Finance may thereupon or any time thereafter
be liquidated and dissolved.
SATISFACTION AND DISCHARGE
Unless a prospectus supplement provides otherwise, Washington Mutual
Finance will be discharged from its obligations under the outstanding debt
securities of a series upon satisfaction of the following conditions: (a)
Washington Mutual Finance 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) Washington Mutual Finance 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 (1) a ruling directed to Washington Mutual Finance 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 Washington Mutual Finance'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 Washington Mutual Finance, 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
Washington Mutual Finance to make additional deposits as aforesaid shall be
subject to the delivery to Washington Mutual Finance 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, Washington Mutual Finance 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.
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MODIFICATION OF THE INDENTURES
Each Indenture provides that Washington Mutual Finance 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
Washington Mutual Finance'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 Washington Mutual Finance,
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;
(3) reduce the amount of the principal of Original Issue Discount
Securities payable on any acceleration of maturity;
(4) change any obligation of Washington Mutual Finance 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;
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(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.
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;
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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 Washington Mutual
Finance 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.
Washington Mutual Finance 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 Washington Mutual Finance 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 Washington Mutual Finance 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
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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. Washington Mutual Finance, the appropriate trustee and any
agent of Washington Mutual Finance 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.
PLAN OF DISTRIBUTION
Washington Mutual Finance 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 Washington Mutual Finance 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 Washington Mutual Finance 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
Washington Mutual Finance 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.
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Under agreements which may be entered into by Washington Mutual Finance,
underwriters, dealers and agents who participate in the distribution of debt
securities may be entitled to indemnification by Washington Mutual Finance
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 Washington
Mutual Finance 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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