COMDISCO INC, 424B5, 2000-03-02

COMDISCO INC
424B5, 2000-03-02
COMPUTER RENTAL & LEASING

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<PAGE>
Filed Pursuant to Rule No. 424(b)(5)
Registration No. 333-87725

PROSPECTUS SUPPLEMENT
(To Prospectus dated February 29, 2000)
$500,000,000

[LOGO OF COMDISCO APPEARS HERE]

Senior Medium-Term Notes, Series I
Due Nine Months to 15 Years From Date of Issue

----------------

Comdisco, Inc. is a Delaware corporation. Our principal executive office is
located at 6111 North River Road, Rosemont, Illinois 60018, and our telephone
number is (847) 698-3000.

The following terms may apply to the notes. We will provide the final terms for
each note in a pricing supplement.

. Ranking as our senior . Interest at fixed or floating
indebtedness rates, or no interest at all.
The floating interest rate may
. Stated maturities of 9 months be based on one or more of the
to 15 years from date of issue following indices plus or minus
a spread and/or multiplied by a
. Redemption and/or repayment spread multiplier:
provisions, if applicable,
whether mandatory or at our . CMT rate
option or the option of the
noteholders . Commercial paper rate
. Payments in U.S. dollars or one
or more foreign currencies . Eleventh district cost of
funds rate
. Federal funds rate
. Minimum denominations of $1,000
or other specified . LIBOR
denominations for foreign . Prime rate
currencies
. Treasury rate
. Book-entry (through The
Depository Trust Company) or . Interest payments on fixed rate
certificated form notes on each February 15 and
August 15
. Interest payments on floating
rate notes on a monthly,
quarterly, semiannual or annual
basis

Investing in the notes involves certain risks. See "Risk Factors" on page S-3.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement, the accompanying prospectus or any pricing
supplement is truthful or complete. Any representation to the contrary is a
criminal offense.

We may sell notes to the agents as principal for resale at varying or
fixed offering prices or through the Agents as agent using their reasonable
efforts on our behalf. If we sell all of the notes, we expect to receive
proceeds of between $496,250,000 and $499,375,000, after paying the agents'
discounts and commissions of between $625,000 and $3,750,000. We may also sell
notes without the assistance of the agents (whether acting as principal or as
agent).
----------------

Merrill Lynch & Co.
Banc of America Securities LLC
Salomon Smith Barney
Warburg Dillon Read LLC
----------------

The date of this prospectus supplement is February 29, 2000
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TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT

<TABLE>
<S> <C>
Risk Factors............................................................. S-3
Description of Notes..................................................... S-5
Certain United States Federal Income Tax Considerations.................. S-20
Plan of Distribution..................................................... S-30
Glossary................................................................. S-32

PROSPECTUS

About This Prospectus.................................................... 2
Where You Can Find More Information...................................... 2
The Company.............................................................. 3
Ratio of Earnings to Fixed Charges....................................... 4
Use of Proceeds.......................................................... 4
Forward Looking Statements............................................... 4
Description of Our Debt Securities....................................... 5
Description of Our Common Stock.......................................... 11
Delaware General Corporation Law and Our Restated Certificate of
Incorporation and Bylaws................................................ 14
Plan of Distribution..................................................... 16
Legal Opinions........................................................... 17
Experts.................................................................. 17
</TABLE>

You should rely on the information contained in this prospectus
supplement, the accompanying prospectus and any pricing supplement. We have
not, and the agents have not, authorized any other person to provide you with
different or additional information. If anyone provides you with different or
additional information, you should not rely on it. We are not, and the agents
are not, making an offer to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should assume that the information
appearing in or incorporated by reference in this prospectus supplement, the
accompanying prospectus and any pricing supplement is accurate as of its date
only. Our business, financial condition, results of operations and prospects
may have changed since that date.

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RISK FACTORS

This prospectus supplement does not describe all of the risks of an
investment in the notes. You should consult your own financial and legal
advisors about the risks entailed by an investment in the notes and the
suitability of your investment in the notes in light of your particular
circumstances. Notes denominated in a foreign currency are not an appropriate
investment for investors who are unsophisticated with respect to foreign
currency transactions. Indexed notes are not an appropriate investment for
investors who are unsophisticated with respect to the type of index or formula
used to determine the amount payable. You should also consider carefully, among
other factors, the matters described below.

Exchange Rates and Exchange Controls

An investment in a note denominated in a currency other than U.S. dollars
entails significant risks. These risks include the possibility of significant
changes in rates of exchange between the U.S. dollar and such currency and the
possibility of the imposition or modification of foreign exchange controls by
either the United States or foreign governments. These risks generally depend
on factors over which we have no control, such as economic, financial, and
political events and the supply of and demand for the relevant currencies.In
addition, if payments on your non-U.S. dollar notes are determined by reference
to a formula containing a multiplier or leverage factor, the effect of any
change in the exchange rates between the applicable currencies will be
increased. In recent years, rates of exchange between the U.S. dollar and
certain currencies have been highly volatile, and you should be aware that
volatility may occur in the future. Fluctuations in any particular exchange
rate that have occurred in the past, however, are not necessarily indicative of
fluctuations in the rate that may occur during the term of any note.
Depreciation of the specified currency for a note against the U.S. dollar would
result in a decrease in the effective yield of that note (on a U.S. dollar
basis) below its coupon rate and, in certain circumstances, could result in a
loss to you on a U.S. dollar basis.

Except as set forth below, if payment in respect of a note is required to
be made in a currency other than U.S. dollars (including Euro), and that
currency is unavailable to us due to the imposition of exchange controls or
other circumstances beyond our control or is no longer used by the government
of the relevant country or union or for the settlement of transactions by
public institutions of or within the international banking community, then all
payments in respect of that note will be made in U.S. dollars until that
currency is again available to us or so used. The amounts payable on any date
in that currency will be converted into U.S. dollars on the basis of the most
recently available market exchange rate for that currency or as otherwise
indicated in the applicable pricing supplement. Any payment in respect of that
note so made in U.S. dollars will not constitute an event of default under the
SunTrust Senior Indenture. Regardless, if a specified currency is unavailable
to us solely because the country of issue has replaced its currency with Euro
or other currency of the European Union pursuant to the Treaty establishing the
European Communities, the amounts payable will, beginning with the date the
replacement becomes effective, be made in Euro or such other currency. The
amounts payable on any date will be converted into Euro or such other currency
on the basis of the most recently available market exchange rate for such
currency or as otherwise indicated in the pricing supplement.

If payment is required to be made in Euro and Euro are unavailable to us
due to the imposition of exchange controls or other circumstances beyond our
control or are no longer used in the European Monetary System, then all
payments will be made in U.S. dollars until Euro are again available to us or
so used. The amount of each payment in U.S. dollars will be computed on the
basis of the equivalent of Euro in U.S. dollars, determined on the basis of the
most recently available market exchange rate for Euro or as otherwise indicated
in the pricing supplement.

The paying agent will make all determinations referred to above at its
sole discretion. All determinations will, in the absence of clear error, be
binding on holders of the notes.

The information set forth in this prospectus supplement with respect to
foreign currency risks is general in nature. We disclaim any responsibility to
prospective purchasers of foreign currency notes with

S-3
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respect to any matters that may affect the purchase, holding or receipt of
payments of principal of, premium, if any, and interest on such notes.
Prospective purchases of foreign currency notes should consult their own
counsel with regard to these matters.

Any pricing supplement relating to notes having a specified currency
other than U.S. dollars will contain information concerning historical exchange
rates for that currency against the U.S. dollar and a brief description of any
relevant exchange controls.

Foreign Currency Judgments

The notes will be governed by and construed in accordance with the
internal laws of the State of New York. As a holder of notes, you may bring an
action based upon an obligation payable in a currency other than U.S. dollars
in courts in the United States. However, courts in the United States have not
customarily rendered judgments for money damages denominated in any currency
other than U.S. dollars. In addition, it is not clear whether in granting such
judgment, the rate of conversion would be determined with reference to the date
of default, the date judgment is rendered or any other date. The Judiciary Law
of the State of New York provides, however, that an action based upon an
obligation payable in a currency other than U.S. dollars will be rendered in
the foreign currency of the underlying obligation and converted into U.S.
dollars at a rate of exchange prevailing on the date the judgment or decree is
entered. In these cases, holders of foreign currency notes would bear the risk
of exchange rate fluctuations between the time the dollar amount of this
judgment is calculated and the time U.S. dollars were paid to the holders.

Risks Associated with Indexed Notes

An investment in indexed notes entails significant risks that are not
associated with an investment in a conventional fixed rate debt security.
Indexation of the interest rate of a note may result in an interest rate that
is less than that payable on a conventional fixed rate debt security issued at
the same time, including the possibility that no interest will be paid.
Indexation of the principal and/or premium on a note may result in an amount of
principal and/or premium payable that is less than the original purchase price
of the note, including the possibility that no amount will be paid. The
secondary market for indexed notes will be affected by a number of factors,
independent of our creditworthiness. These factors include the volatility of
the index selected, the time remaining to the Maturity of the notes, the amount
outstanding of the notes and market interest rates. The value of an index can
depend on a number of interrelated factors, including economic, financial and
political events, over which we have no control. In addition, if the formula
used to determine the amount of principal, premium and/or interest payable with
respect to indexed notes contains a multiple or leverage factor, the effect of
any change in the index will be increased. In recent years, values of certain
indices and formulas have been volatile and volatility in those and other
indices and formulas may be expected in the future. The historical experience
of an index should not be taken as an indication of its future performance.

Credit Ratings

The credit ratings assigned to our medium-term note program are a
reflection of our credit status and do not reflect the impact of the factors
discussed above on the market value of indexed notes. Accordingly, you should
consult your own financial and legal advisors as to the risks entailed by an
investment in indexed notes. In addition, real or anticipated changes in our
credit ratings generally will affect the market value of the notes.

Redemption

If your notes are redeemable at our option or are otherwise subject to
mandatory redemption, we may (in the case of optional redemption) or must (in
the case of mandatory redemption) choose to redeem such notes at times when
prevailing interest rates may be relatively low. Accordingly, you generally
will not be able to reinvest the redemption proceeds in a comparable security
at an effective interest rate as high as that of the notes.

S-4
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Uncertain Trading Markets

We cannot assure you a trading market for your notes will ever develop or
be maintained. Many factors independent of our creditworthiness affect the
trading market. These factors include:

.the complexity and volatility of the index or formula applicable to
the notes,

.the method of calculating the principal, premium and interest in
respect of the notes,

.the time remaining to the maturity of the notes,

.the outstanding amount of the notes,

.the redemption features of the notes,

.the amount of other debt securities linked to the index or formula
applicable to the notes, and

.the level, direction and volatility of market interest rates
generally.

In addition, certain notes have a more limited trading market and
experience more price volatility because they were designed for specific
investment objectives or strategies. There may be a limited number of buyers
when you decide to sell these notes. This may affect the price you receive for
these notes or your ability to sell them at all. You should not purchase notes
unless you understand and know you can bear these investment risks. You should
also review the information under "Forward Looking Statements" beginning at
page 4 of the prospectus before making your investment decision.

DESCRIPTION OF NOTES

General

The following description of terms of the notes supplements the general
description of the debt securities provided in the prospectus and is not
complete. However, the pricing supplement for each offering of notes will
contain the specific information and terms for that offering. The pricing
supplement may also add, update or change information contained in this
prospectus supplement. It is important for you to consider the information
contained in the prospectus, the prospectus supplement and the pricing
supplement in making your investment decision.

This section describes some technical concepts, and thus we occasionally
use defined terms. You will find an alphabetized glossary at the end of this
prospectus supplement that defines all of the capitalized terms used in this
prospectus supplement that are not defined in this section.

The Indenture. We will issue the notes under the SunTrust Senior
Indenture between us and SunTrust Bank. Since we have only summarized the most
significant portions of the Indenture below, you may want to refer to the
SunTrust Senior Indenture for more detailed information. We have not issued any
debt securities under the SunTrust Senior Indenture prior to the date of this
prospectus supplement.

Ranking. The notes are "senior debt securities" as described in the
prospectus and will be unsecured and will rank equally with all our other
unsecured and unsubordinated debt obligations. The notes and the SunTrust
Senior Indenture will not limit us from incurring additional debt and will not
place any other financial restrictions on us.

Amount. The amount of notes that we may issue under this prospectus
supplement is $500,000,000. The SunTrust Senior Indenture does not limit the
amount of notes that we may offer. If a note is an Original Issue Discount
Note, we will use its initial offering price to calculate the amount issued.

Terms. Interest-bearing notes will bear interest at either fixed or
floating rates as specified in the applicable pricing supplement. Notes may be
issued at significant discounts from their principal amount payable at stated
maturity, or on any date before the stated maturity date on which the principal
or an installment of principal of a note becomes due and payable, whether by
the declaration of acceleration, call for redemption at our option, repayment
at your option or otherwise. Some notes may not bear interest.

S-5
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Reopening of Issue. We may, from time to time, reopen an issue of notes
and issue additional notes with the same terms (including issue date, Maturity
and interest rate basis) as notes issued on an earlier date. After these
additional notes are issued they will be fungible with the notes issued on an
earlier date.

Maturity. Each note will mature on any day from 9 months to 15 years
from its date of issue. However, each note may also be subject to redemption
at our option and repayment at your option (see Optional Redemption below).

Pricing Supplement. The pricing supplement relating to a note will
describe the following terms:

.the specified currency;

.whether the note is a fixed rate note, a regular floating rate note,
a floating rate/fixed rate note, an inverse floating rate note, an
indexed note, or an amortizing note;

.the issue price;

.the original issue date;

.the stated maturity date;

.for a fixed rate note, the rate per annum at which it will bear
interest, if any, and the date on which interest will be payable
if other than February 15 and August 15;

.for a floating rate note, the interest rate base or bases, the
initial interest rate, the interest reset period, the interest
payment dates, the Index Maturity, the Designated LIBOR Currency,
if any, the maximum interest rate, if any, the minimum interest
rate, if any, the Spread and/or Spread Multiplier, if any, and any
other terms relating to the particular method of calculating the
interest rate for the note;

.whether the note is an Original Issue Discount Note;

.for an indexed note, the manner in which interest payments and the
principal amount payable at Maturity will be determined;

.if such note is an amortizing note, an amortization schedule;

.whether the note may be redeemed at our option, or repaid at the
holder's option prior to the stated maturity date as described
further under "Optional Redemption" below, and if so, the terms of
the redemption or repayment;

.whether the notes are a reopening of notes previously issued; and

.any other terms that do not conflict with the provisions of the
Indenture.

Form of the Notes. We will issue the notes either in certificated form
or pursuant to a book-entry system.

Book-Entry Notes. When we issue notes in book-entry form, we will issue
one or more global certificates representing the entire issue of notes. All
notes previously issued under the prospectus have been issued in book-entry
form. These certificates will name a nominee of The Depository Trust Company,
New York, New York ("DTC") as the owner of the notes. DTC maintains a
computerized system that will reflect your ownership of the notes through an
account you will maintain with your broker/dealer, bank, trust company or
other representative.

DTC's nominee will be considered the owner of your note in our records
and will be the entity entitled to cast a vote regarding your note. However,
DTC and the broker/dealers, banks, trust companies and other representatives
that are part of DTC's computerized system are required to contact you for
voting instructions.

S-6
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Certificated Notes. When we issue notes in certificated form, you will
receive a certificate evidencing your note. SunTrust will issue certificated
notes on our behalf and will only prepare such certificated notes at our
request. The certificate will name you as the owner of the note, unless you
choose to have your broker/dealer, bank, trust company or other representative
hold these certificates for you. If your name appears on the certificate
evidencing your note, then you will be considered the owner of your note for
all purposes under the Indenture. For example, if we need to ask the holders
of the notes to vote on a proposed amendment to the notes, you will be asked
to cast the vote regarding your note. If you have chosen to have some other
entity hold the certificates for you, that entity will be considered the owner
of your note in our records and will be entitled to cast the vote regarding
your note. However, this entity is required to contact you for voting
instructions.

Exchanges. Certificated notes cannot be exchanged for book-entry notes.
Book-entry notes can be exchanged for certificated notes only if:

. DTC notifies us that it is unwilling or unable to hold global
certificates and another depositary is not appointed within 90
days after we are so notified by DTC,

. if at any time DTC ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended,

. we, at our option, elect to issue the notes in definitive form, or

. there is, or continues to be, an event of default with respect to
the notes.

In these limited circumstances, we will issue to you certificated notes
in exchange for the book-entry notes. There will be no service charge for this
exchange, but if a tax or other governmental charge is imposed, we may require
you to pay it.

Denominations. The notes will have minimum denominations of $1,000,
increased in multiples of $1,000. The authorized denominations of notes
denominated in a foreign or composite currency will be described in the
pricing supplement. DTC currently limits the maximum denomination of any
single global note to $400,000,000.

Registration and Transfer of Notes.

Book-Entry Notes. If you transfer your note while it is in book-entry
form, the transfer will be reflected on the computerized system at DTC. Your
broker/dealer, bank, trust company or other representative will arrange for
the transfer to be reflected on DTC's records.

Certificated Notes. In addition to acting as trustee under the SunTrust
Senior Indenture, SunTrust also acts as our registrar for notes issued in
certificated form. You may contact SunTrust Bank in care of Harris Trust
Company of New York, Wall Street Plaza, 19th Floor, New York, New York 10005,
Attention: Manager, if you want to:

.Register the transfer of any certificated note;

.Exchange certificated notes for notes of different denominations;

.Deliver payment instructions;

.Obtain a new note to replace a note that has been lost or destroyed
(you may be required to provide a document to SunTrust and us
agreeing to return the new certificate if the missing one is
found); or

.Present notes that have matured or been redeemed in exchange for
payment.

Methods of Payment.

SunTrust also acts as our paying agent, and will make all payments on
the notes on our behalf.

Book-Entry Notes. SunTrust will make payments of principal and interest
on book-entry notes to the account of DTC's nominee by wire transfer of
immediately available funds. Neither we nor SunTrust will make any payments to
owners of beneficial interests in book-entry notes. Instead, DTC will credit
the funds to which

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you are entitled to the account of the broker/dealer, bank, trust company or
other representative through which you hold your note. That entity, in turn,
will credit these funds to your account (or the account of any other
intermediary through which you hold your note).

We understand that DTC's current practice is to credit interest payments
(including interest payable at maturity) and principal payments in immediately
available funds. These payments and credits will be made pursuant to the rules
of DTC, in accordance with any standing instructions you have with your
broker/dealer, bank, trust company or other representative or other
intermediary and with customary practice in the broker/dealer industry. Neither
we nor SunTrust will be involved with, or responsible for, the movement of
funds once SunTrust has paid DTC.

Certificated Notes. If you hold certificated notes, payments of principal
and interest due at Maturity or earlier redemption will be paid by wire
transfer of immediately available funds after you present the matured or
redeemed note at SunTrust's office (the address is given above). Interest
payable at any other time will be paid by check mailed to your address as it
appears in SunTrust's records. If you own $10,000,000 or more of notes having
the same terms and conditions, we will pay you interest prior to Maturity by
wire transfer of immediately available funds if you give the appropriate
instructions to SunTrust at least 15 days before the applicable interest
payment date.

Special Payment Provisions for Notes Denominated in a Foreign Currency.
Purchasers of notes denominated in a foreign currency must pay for their notes
in that currency. If you prefer to pay in U.S. dollars, SunTrust, acting as
exchange rate agent, will convert U.S. dollars into the foreign currency on
your behalf to enable you to make payment in that currency. You must notify
SunTrust that you would like them to provide this service for you at least
three Business Days before the date of delivery of the note. These services are
available only in connection with the initial distribution of notes denominated
in a foreign currency.

Unless otherwise specified in the applicable pricing supplement, we must
make payments of principal of, and premium, if any, and interest, if any, on, a
foreign currency note in the specified currency. Amounts payable by us in the
specified currency will be converted by the exchange rate agent named in the
applicable pricing supplement into United States dollars for payment to you
unless otherwise specified in the applicable pricing supplement. You may also
elect, in the manner hereinafter described, to receive such amounts in the
specified currency.

Any United States dollar amount to be received by you will be based on
the highest bid quotation in The City of New York received by the exchange rate
agent at approximately 11:00 A.M., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of whom may be the exchange rate agent) selected by the
exchange rate agent and approved by us for the purchase by the quoting dealer
of the specified currency for United States dollars for settlement on that
payment date in the aggregate amount of that specified currency payable to all
holders of foreign currency notes scheduled to receive United States dollar
payments and at which the applicable dealer commits to execute a contract. You
will bear all currency exchange costs by deductions from these payments. If
three of these bid quotations are not available, payments will be made in the
specified currency.

You may elect to receive all or a specified portion of any payment of
principal, premium, if any, and/or interest, if any, in the specified currency
by submitting a written request for that payment to the Trustee at its
corporate trust administration office in Atlanta, Georgia on or prior to the
applicable record date or at least fifteen calendar days prior to maturity, as
the case may be. Such written request may be mailed or hand delivered or sent
by cable, telex or other form of facsimile transmission. You may elect to
receive all or a specified portion of all future payments in the specified
currency and need not file a separate election for each payment. Your election
will remain in effect until revoked by written notice to the Trustee, but
written notice of any revocation must be received by the Trustee on or prior to
the applicable record date or at least fifteen calendar days prior to maturity,
as the case may be. If your foreign currency notes are held in the name of a
broker or nominee, you should contact that broker or nominee to determine
whether and how an election to receive payments in the specified currency may
be made.

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If a note is represented by a global note or notes, DTC or its nominee
will be the holder of the note and will be entitled to all payments on the
note. Although DTC can hold notes denominated in foreign currencies, all
payments made to DTC will be in U.S. dollars. Accordingly, if you hold a
beneficial interest in a related global note or notes and you wish to elect to
receive payments of principal, premium, if any, and/or interest, if any, in the
specified currency, you must notify the participant through which you own your
interest on or prior to the applicable record date or at least fifteen calendar
days prior to maturity, as the case may be, of your election. This participant
must notify DTC of that election on or prior to the third Business Day after
that record date or at least twelve calendar days prior to maturity, as the
case may be, and the DTC will notify the Trustee of that election on or prior
to the fifth Business Day after that record date or at least ten calendar days
prior to maturity, as the case may be. If complete instructions are received by
the participant from you and forwarded by the participant to DTC, and by DTC to
the Trustee, on or prior to these dates, then you will receive payments in the
specified currency.

Payments of the principal of, and premium, if any, and/or interest, if
any, on foreign currency notes you hold which are to be made in United States
dollars will be made in the manner specified in this prospectus supplement with
respect to notes denominated in United States dollars. See "--General."
Payments of interest, if any, on foreign currency notes which are to be made in
the specified currency on an Interest Payment Date other than Maturity will be
made by check mailed to your address as it appears in the security register,
subject to the right to receive those interest payments by wire transfer of
immediately available funds under the circumstances described under "--
General." Payments of principal of, and premium, if any, and/or interest, if
any, on foreign currency notes which are to be made in the specified currency
at maturity will be made by wire transfer of immediately available funds to an
account with a bank which you designate at least fifteen calendar days prior to
maturity, provided that the bank has appropriate facilities therefor and that
the applicable foreign currency note is presented and surrendered at the office
or agency maintained by Comdisco for that purpose in time for the Trustee to
make these payments in those funds in accordance with its normal procedures.

If a specified currency is not available for the payment of principal,
premium or interest with respect to a foreign currency note due to the
imposition of exchange controls or other circumstances beyond our control, we
will be entitled to satisfy our obligations to holders of foreign currency
notes by making that payment in U.S. dollars on the basis of the noon buying
rate in The City of New York for cable transfers of the specified currency as
certified for customs purposes (or, if not so certified as otherwise
determined) by the Federal Reserve Bank of New York (the "Market Exchange
Rate") as computed by the exchange rate agent on the basis of the most recently
available Market Exchange Rate on or before the date that payment is due or as
otherwise indicated in an applicable pricing supplement. Any payment made under
these circumstances in U.S. dollars where the required payment is in a
specified currency will not constitute a default under the SunTrust Senior
Indenture with respect to the notes.

All determinations referred to above made by the exchange rate agent will
be at its sole discretion and will, in the absence of clear error, be
conclusive for all purposes and binding on the holders of the foreign currency
notes.

Recipients of Payments. Payments of interest on notes are generally
payable to the person in whose name the note is registered at the close of
business on the record date before each interest payment date. However,
interest will be payable at Maturity, redemption or repayment to the person to
whom principal is payable. The first interest payment on any note originally
issued between a record date and an interest payment date or on an interest
payment date will be made on the interest payment date after the next record
date. The record date for any interest payment date for a floating rate note
will be the date, whether or not a Business Day, 15 calendar days immediately
before the interest payment date, and for a fixed rate note will be the last
day of January or July, whether or not a Business Day, immediately before the
interest payment date or Maturity, unless otherwise specified in the applicable
pricing supplement.

Optional Redemption. We may issue notes that permit us to redeem them
prior to their Maturity ("calls") or that permit you to require us to redeem
them prior to their Maturity ("puts"). Any of these

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redemption provisions, including the date(s) on which the call or put may
occur and whether redemptions may be made in whole or in part, will be
described in the pricing supplement relating to the specific notes.

If we are permitted to call any notes, we will give notice of redemption
to you, or the entity that is the registered holder of your notes, by mail at
least 30 calendar days and not more than 60 calendar days prior to the date
set for redemption.

If you are permitted to put any notes, you must notify SunTrust at least
30 calendar days and not more than 60 calendar days prior to the date set for
redemption. For any note to be repaid, SunTrust must receive (1) in the case
of a certificated note, the note with the attached "Option to Elect Repayment"
form completed, or a letter from a broker/dealer, bank or trust company
notifying SunTrust of your intent to redeem your notes and guaranteeing that
you will deliver the note and the attached "Option to Elect Repayment" form
not later than five Business Days after the date set for redemption or (2) in
the case of a book-entry note, instructions to that effect from the beneficial
owner of the note to DTC and forwarded by DTC to SunTrust.

Any notice of redemption delivered by you or by us will be irrevocable.

Open Market Purchases. We may, at any time, purchase notes at any price
from holders of notes or in the open market. If we purchase any of our notes,
we may hold them, resell them or surrender them to SunTrust for cancellation.

Interest and Interest Rates

The interest rates we will offer with respect to the notes may differ
depending on, among other things, the aggregate principal amount of notes
purchased in a single transaction. Each interest-bearing note will bear
interest from the date of issue at the rate per annum or, in the case of a
floating rate note, pursuant to the interest rate formula stated in the
applicable note and in the applicable pricing supplement, until the principal
of the note is paid or made available for payment. Interest payments on fixed
rate notes and floating rate notes will equal the amount of interest accrued
from and including the immediately preceding interest payment date in respect
of which interest has been paid or made available for payment or from and
including the date of issue, if no interest has been paid or made available
for payment with respect to the note, to, but excluding, the related interest
payment date or at maturity, as the case may be.

Interest will be payable in arrears on each interest payment date
specified in the applicable pricing supplement on which an installment of
interest is due and payable and at maturity. The first payment of interest on
any note originally issued between a regular record date and the related
interest payment date will be made on the interest payment date immediately
following the next succeeding regular record date to the registered holder on
the next succeeding regular record date. The regular record date will be the
fifteenth calendar day, whether or not a Business Day, immediately preceding
the related interest payment date.

Fixed Rate Notes. Each fixed rate note will bear interest at the annual
rate specified in the note and in the applicable pricing supplement. Interest
on the fixed rate notes will be paid on February 15 and August 15 of each year
and at maturity or as specified in the applicable pricing supplement. Interest
on fixed rate notes will be computed and paid on the basis of a 360-day year
of twelve 30-day months; provided that we may designate in the pricing
supplement that interest will be computed and paid on the basis of (1) the
actual number of days in the interest payment period divided by the actual
number of days in the year or (2) the actual number of days in the interest
payment period divided by 360. In the event that any Interest Payment Date (as
defined below) or Maturity for any fixed rate note is not a Business Day,
interest on that fixed rate note will be paid on the next succeeding Business
Day; however, we will not pay any additional interest due to the delay in
payment.

Floating Rate Notes.

General. Each floating rate note will have an interest rate formula. The
formula may be based on:

.the CMT Rate,

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.the Commercial Paper Rate,

.the Eleventh District Cost of Funds Rate,

.the Federal Funds Rate,

.LIBOR,

.the Prime Rate,

.the Treasury Rate, or

.any other interest rate basis or interest rate formula as may be
specified in the applicable pricing supplement.

The applicable pricing supplement will also indicate the "Spread" and/or
"Spread Multiplier", if any. In addition, any floating rate note may have a
maximum or minimum interest rate limitation.

A floating rate note other than a floating rate/fixed rate note or
inverse floating rate note will bear interest at the rate determined by
reference to the applicable interest rate basis or bases (a) plus or minus the
applicable Spread, if any, and/or (b) multiplied by the applicable Spread
Multiplier, if any. Commencing on the initial Interest Reset Date, the rate at
which interest on that regular floating rate note shall be payable shall be
reset as of each Interest Reset Date; provided, however, that the interest rate
in effect for the period, if any, from the date of issue to the initial
Interest Reset Date will be the initial interest rate.

A floating rate/fixed rate note will bear interest at the rate determined
by reference to the applicable interest rate basis or bases (a) plus or minus
the applicable Spread, if any, and/or (b) multiplied by the applicable Spread
Multiplier, if any. Commencing on the initial Interest Reset Date, the rate at
which interest on that floating rate/fixed rate note shall be payable shall be
reset as of each Interest Reset Date; provided, however, that (y) the interest
rate in effect for the period, if any, from the date of issue to the initial
Interest Reset Date will be the initial interest rate and (z) the fixed
interest rate in effect for the period commencing on the date specified
therefor in the applicable pricing supplement to Maturity shall be the interest
rate so specified in the applicable pricing supplement or, if no such rate is
specified, the interest rate in effect thereon on the day immediately preceding
the date the fixed rate commences.

An inverse floating rate note will bear interest at the specified fixed
interest rate minus the rate determined by reference to the applicable interest
rate basis or bases (a) plus or minus the applicable Spread, if any, and/or (b)
multiplied by the applicable Spread Multiplier, if any; provided, however,
that, unless otherwise specified in the applicable pricing supplement, the
interest rate thereon will not be less than zero. Commencing on the initial
Interest Reset Date, the rate at which interest on such inverse floating rate
note shall be payable shall be reset as of each Interest Reset Date; provided,
however, that the interest rate in effect for the period, if any, from the date
of issue to the initial Interest Reset Date will be the Initial Interest Rate.

Date of Interest Rate Change

Unless otherwise specified in the applicable pricing supplement, the
interest rate with respect to each interest rate basis will be determined in
accordance with the applicable provisions below. Except as set forth above or
in the applicable pricing supplement, the interest rate in effect on each day
shall be (1) if that day is an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding that
Interest Reset Date or (2) if that day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the most recent Interest Reset Date.

The interest rate on each floating rate note may be reset daily, weekly,
monthly, quarterly, semiannually or annually (this period is the "Interest
Reset Period" and the first day of each Interest Reset Period is the "Interest
Reset Date"). Unless we state otherwise in the applicable pricing supplement,
the Interest Reset Dates will be:

. for floating rate notes which reset daily, each Business Day;

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. for floating rate notes (other than Treasury Rate Notes) which
reset weekly, the Wednesday of each week;

. for Treasury Rate notes which reset weekly, the Tuesday of each
week, except as provided below under "Treasury Rate Notes";

. for floating rate notes (other than Eleventh District Cost of
Funds Rate Notes) which reset monthly, the third Wednesday of each
month;

. for Eleventh District Cost of Funds Rate Notes all of which reset
monthly, the first calendar day of each month;

. for floating rate notes which reset quarterly, the third Wednesday
of March, June, September and December of each year;

. for floating rate notes which reset semi-annually, the third
Wednesday of the two months of each year indicated in the
applicable pricing supplement; and

. for floating rate notes which reset annually, the third Wednesday
of the month of each year indicated in the applicable pricing
supplement.

The initial interest rate or basis on each note effective until the first
Interest Reset Date will be indicated in the applicable pricing supplement.
Thereafter, the interest rate will be the rate determined on the next Interest
Determination Date, as explained below. Each time a new interest rate is
determined, it will become effective on the subsequent Interest Reset Date.
However, no changes will be made in the interest rate during the ten days prior
to Maturity. If any Interest Reset Date is not a Business Day, then the
Interest Reset Date will be postponed to the next Business Day. However, for a
LIBOR Note, if the next Business Day is in the next calendar month, the
Interest Reset Date will be the immediately preceding Business Day.

The rate of interest on floating rate/fixed rate notes will not reset
after the applicable fixed rate commencement date.

The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be the rate determined by the calculation
agent as of the applicable Interest Determination Date and calculated on or
prior to the Calculation Date, except with respect to LIBOR and the Eleventh
District Cost of Funds Rate, which will be calculated on that Interest
Determination Date.

In addition to any maximum interest rate that may apply to any floating
rate note, the interest rate on floating rate notes will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States law of general application.

When Interest is Paid

Unless we state otherwise in the applicable pricing supplement, we will
pay interest on floating rate notes as follows:

. for notes that reset daily, weekly or monthly, on the third
Wednesday of each month or on the third Wednesday of March, June,
September and December of each year, as specified in the
applicable pricing supplement;

. for notes that reset quarterly, on the third Wednesday of March,
June, September and December of each year;

. for notes that reset semiannually, on the third Wednesday of the
two months of each year specified in the applicable pricing
supplement; and

. for notes that reset annually, on the third Wednesday of the month
of each year specified in the applicable pricing supplement.

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If interest is payable on a day which is not a Business Day, payment will
be postponed to the next Business Day. However, for LIBOR Notes, if the next
Business Day is in the next calendar month, interest will be paid on the
preceding Business Day.

The interest payable will be the amount of interest accrued to, but
excluding, the Interest Payment Date. However, for floating rate notes on which
the interest resets daily or weekly, the interest payable will include interest
accrued to and including the record date prior to the Interest Payment Date. If
the Interest Payment Date is also a day that principal is due, the interest
payable will include interest accrued to, but excluding, maturity.

If the Maturity of a floating rate note falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and interest
will be made on the next succeeding Business Day as if made on the date that
payment was due, and no interest will accrue on that payment for the period
from and after Maturity to the date of that payment on the next succeeding
Business Day.

How Interest is Calculated

We will appoint a calculation agent to calculate interest rates on the
floating rate notes. Unless we choose a different party in the pricing
supplement, the lead agent will be the calculation agent for each note.

All percentages resulting from any calculation on floating rate notes
will be rounded to the nearest one hundred-thousandth of a percentage point,
with five-one millionths of a percentage point rounded upwards (e.g., 9.876545%
(or .09876545) would be rounded to 9.87655% (or .0987655)), and all amounts
used in or resulting from that calculation on floating rate notes will be
rounded, in the case of United States dollars, to the nearest cent or, in the
case of a foreign currency, to the nearest unit (with one-half cent or unit
being rounded upwards).

With respect to each floating rate rote, accrued interest is calculated
by multiplying its principal amount by an accrued interest factor. This accrued
interest factor is computed by adding the interest factor calculated for each
day in the applicable Interest Period. Unless otherwise specified in the
applicable pricing supplement, the interest factor for each of these days will
be computed by dividing the interest rate applicable to such day by 360, in the
case of floating rate notes for which an applicable interest rate basis is the
Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR or the Prime Rate, or by the actual number of days in the
year in the case of floating rate notes for which an applicable interest rate
basis is the CMT Rate or the Treasury Rate. Unless otherwise specified in the
applicable pricing supplement, the interest factor for floating rate notes for
which the interest rate is calculated with reference to two or more interest
rate bases will be calculated in each period in the same manner as if only one
of the applicable interest rate basis specified in the applicable pricing
supplement applied.

Upon request of the holder of any floating rate note, the calculation
agent will disclose the interest rate then in effect and, if determined, the
interest rate that will become effective as a result of a determination made
for the next succeeding Interest Reset Date with respect to that floating rate
note.

Unless otherwise specified in the applicable pricing supplement, the
calculation agent shall determine each Interest Rate Basis in accordance with
the following provisions.

The "CMT Rate" for any Interest Determination Date means:

. if CMT Telerate Page 7051 is specified in the applicable pricing
supplement:

. the percentage equal to the yield for United States Treasury
securities at "constant maturity" having the Index Maturity
specified in the applicable pricing supplement as published in
H.15(519) under the caption "Treasury Constant Maturities", as the
yield is displayed on Bridge Telerate, Inc., (or any successor
service), on page 7051, (or any other page as may replace page
7051 on that service) ("Telerate Page 7051"), for the applicable
Interest Determination Date, or

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. if the rate referred to in the preceding clause does not appear on
Telerate Page 7051, the percentage equal to the yield for United
States Treasury securities at "constant maturity" having the Index
Maturity specified in the applicable pricing supplement and for
the applicable Interest Determination Date as published in
H.15(519) under the caption "Treasury Constant Maturities", or

. if the rate referred to in the preceding clause does not appear in
H.15(519), the rate on the applicable Interest Determination Date
for the period of the Index Maturity specified in the applicable
pricing supplement as may then be published by either the Federal
Reserve System Board of Governors or the United States Department
of the Treasury that the calculation agent determines to be
comparable to the rate which would otherwise have been published
in H.15(519), or

. if the rate referred to in the preceding clause is not published,
the rate on the applicable Interest Determination Date calculated
by the calculation agent as a yield to maturity based on the
arithmetic mean of the secondary market bid prices at
approximately 3:30 P.M., New York City time, on the applicable
Interest Determination Date of three leading primary United States
government securities dealers in The City of New York, which may
include the agents or their affiliates (each, a "Reference
Dealer"), selected by the calculation agent from five Reference
Dealers selected by the calculation agent and eliminating the
highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality,
one of the lowest, for United States Treasury securities with an
original maturity equal to the Index Maturity specified in the
applicable pricing supplement, a remaining term to maturity no
more than 1 year shorter than the Index Maturity specified in the
applicable pricing supplement and in a principal amount that is
representative for a single transaction in the securities in the
market at that time, or

. if fewer than five but more than two of the prices referred to in
the preceding clause are provided as requested, the rate on the
applicable Interest Determination Date calculated by the
calculation agent based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of the quotations
shall be eliminated, or

. if fewer than three prices referred to in the second preceding
clause are provided as requested, the rate on the applicable
Interest Determination Date calculated by the calculation agent as
a yield to maturity based on the arithmetic mean of the secondary
market bid prices as of approximately 3:30 P.M., New York City
time, on the applicable Interest Determination Date of three
Reference Dealers selected by the calculation agent from five
Reference Dealers selected by the calculation agent and
eliminating the highest quotation or, in the event of equality,
one of the highest, and the lowest quotation or, in the event of
equality, one of the lowest, for United States Treasury securities
with an original maturity greater than the Index Maturity
specified in the applicable pricing supplement, a remaining term
to maturity closest to the Index Maturity specified in the
applicable pricing supplement and in a principal amount that is
representative for a single transaction in the securities in the
market at that time, or

. if fewer than five but more than two prices referred to in the
preceding clause are provided as requested, the rate on the
applicable Interest Determination Date calculated by the
calculation agent based on the arithmetic mean of the bid prices
obtained and neither the highest nor the lowest of the quotations
will be eliminated, or

. if fewer than three prices referred to in the second preceding
clause are provided as requested, the CMT Rate in effect on the
applicable Interest Determination Date.

. if CMT Telerate Page 7052 is specified in the applicable pricing
supplement:

. the percentage equal to the one-week or one-month, as specified in
the applicable pricing supplement, average yield for United States
Treasury securities at "constant maturity" having the Index
Maturity specified in the applicable pricing supplement as
published in H.15(519) opposite the caption "Treasury Constant
Maturities", as the yield is displayed on Bridge

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Telerate, Inc., (or any successor service), on page 7052, (or any
other page as may replace page 7052 on that service) ("Telerate
Page 7052"), for the week or month, as applicable, ended
immediately preceding the week or month, as applicable, in which
the related Interest Determination Date falls, or

. if the rate referred to in the preceding clause does not appear on
Telerate Page 7052, the percentage equal to the one-week or one-
month, as specified in the applicable pricing supplement, average
yield for United States Treasury securities at "constant maturity"
having the Index Maturity specified in the applicable pricing
supplement and for the week or month, as applicable, preceding the
applicable Interest Determination Date as published in H.15(519)
opposite the caption "Treasury Constant Maturities," or

. if the rate referred to in the preceding clause does not appear in
H.15(519), the one-week or one-month, as specified, average yield
for United States Treasury securities at "constant maturity"
having the Index Maturity specified in the applicable pricing
supplement as otherwise announced by the Federal Reserve Bank of
New York for the week or month, as applicable, ended immediately
preceding the week or month, as applicable, in which the related
Interest Determination Date falls, or

. if the Federal Reserve Bank of New York does not publish the rate
referred to in the preceding clause, the rate on the applicable
Interest Determination Date calculated by the calculation agent as
a yield to maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time,
on the applicable Interest Determination Date from five Reference
Dealers selected by the calculation agent and eliminating the
highest quotation, or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality,
one of the lowest, for United States Treasury securities with an
original maturity equal to the Index Maturity specified in the
applicable pricing supplement, a remaining term to maturity no
more than 1 year shorter than the Index Maturity specified in the
applicable pricing supplement and in a principal amount that is
representative for a single transaction in the securities in the
market at that time, or

. if fewer than five but more than two prices referred to in the
preceding clause are provided as requested, the rate will be
calculated by the calculation agent based on the arithmetic mean
of the bid prices obtained and neither the highest nor the lowest
of the quotations will be eliminated, or

. if fewer than three prices referred to in the second preceding
clause are provided as requested, the CMT Rate in effect on the
applicable Interest Determination Date.

If two United States Treasury securities with an original maturity
greater than the Index Maturity specified in the applicable pricing supplement
have remaining terms to maturity equally close to the Index

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Maturity specified in the applicable pricing supplement, the quotes for the
United States Treasury security with the shorter original remaining term to
maturity will be used.

Commercial Paper Rate. The "Commercial Paper Rate" for any Interest
Determination Date means the Money Market Yield of the rate on that date for
commercial paper having the Index Maturity specified in the applicable pricing
supplement, as published in H.15(519) under the heading "Commercial Paper--
Nonfinancial" or, if not so published by 3:00 P.M., New York City time, on the
Calculation Date, the Commercial Paper Rate will be the Money Market Yield as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption "Commercial Paper--
Nonfinancial."

The following procedures will be followed if the Commercial Paper Rate
cannot be determined as described above:

. If the above rate is not published in H.15(519), H.15 Daily Update
or another recognized electronic source by 3:00 P.M., New York
City time, on the Calculation Date, then the Commercial Paper Rate
will be the Money Market Yield of the arithmetic mean of the
offered rates at approximately 11:00 A.M., New York City time, on
that Interest Determination Date of three leading dealers of
United States dollar commercial paper in The City of New York
(which may include the Agents or their affiliates) for commercial
paper having the Index Maturity specified in the applicable
pricing supplement placed for industrial issuers whose bond rating
is "Aa", or the equivalent, from a nationally recognized
statistical rating organization. The calculation agent will select
the three dealers referred to above.

. If fewer than three dealers selected by the calculation agent are
quoting as mentioned above, the Commercial Paper Rate determined
will remain the Commercial Paper Rate then in effect on that
Interest Determination Date.

Eleventh District Cost of Funds Rate. The "Eleventh District Cost of
Funds Rate" for any Interest Determination Date is the rate equal to the
monthly weighted average cost of funds for the calendar month immediately
preceding the Interest Determination Date as displayed on the Telerate Page
7058 by 11:00 A.M., San Francisco time, on the Calculation Date for such
Interest Determination Date under the caption "Eleventh District."

The following procedures will be used if the Eleventh District Cost of
Funds Rate cannot be determined as described above:

. If the rate is not displayed on the relevant page by 11:00 A.M.,
San Francisco time, on the Calculation Date, then the Eleventh
District Cost of Funds Rate will be the monthly weighted average
cost of funds paid by member institutions, of the Eleventh Federal
Home Loan Bank District as announced by the Federal Home Loan Bank
of San Francisco for the calendar month immediately preceding the
Interest Determination Date.

. If no announcement was made relating to the calendar month
immediately preceding the Interest Determination Date, the
Eleventh District Cost of Funds Rate will remain the Eleventh
District Cost of Funds Rate then in effect on that Interest
Determination Date.

Federal Funds Rate. The "Federal Funds Rate" for any Interest
Determination Date is the rate on that date for United States dollar federal
funds as published in H.15(519) prior to 3:00 P.M., New York city time, on the
Calculation Date for that Interest Determination Date under the heading
"Federal Funds (Effective)", as displayed on Telerate Page 120.

The following procedures will be used if the Federal Funds Rate cannot be
determined as described above:

. If the rate is not displayed on the relevant page or is not
published in H15(519) by 3:00 P.M., New York City time, on the
Calculation Date, the Federal Funds Rate will be the rate on that
Interest Determination Date as published in H.15 Daily Update, or
such other

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recognized electronic source used for the purpose of displaying
such rate, under the caption "Federal Funds (Effective)."

.If that rate is not published in H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on
the Calculation Date, then the calculation agent will determine
the Federal Funds Rate to be the arithmetic mean of the rates for
the last transaction in overnight United States dollar federal
funds arranged by three leading brokers of United States dollar
federal funds transactions in The City of New York (which may
include the Agents or their affiliates) as of 9:00 A.M., New York
City time, on that Interest Determination Date. The calculation
agent, after consultation with us, will select the three brokers
referred to above.

.If fewer than three brokers selected by the calculation agent are
quoting as mentioned above, the Federal Funds Rate will be the
Federal Funds Rate in effect on that Interest Determination Date.

LIBOR. On each Interest Determination Date, the calculation agent will
determine "LIBOR":

.If "LIBOR Telerate" is specified in the pricing supplement, LIBOR
will be the rate for deposits in the Designated LIBOR Currency
having the Index Maturity described in the applicable pricing
supplement on the applicable Interest Reset Date, as that rate
appears on the Designated LIBOR Page as of 11:00 A.M., London
time, on that Interest Determination Date.

.If "LIBOR Reuters" is specified in the pricing supplement, LIBOR
will be the arithmetic mean of the offered rates for deposits in
the Designated LIBOR Currency having the Index Maturity described
in the applicable pricing supplement on the applicable Interest
Reset Date, as those rates appear on the Designated LIBOR Page as
of 11:00 A.M., London time, on that Interest Determination Date,
if at least two of those offered rates appear on the Designated
LIBOR Page.

If the pricing supplement does not specify "LIBOR Telerate" or "LIBOR
Reuters," the LIBOR Rate will be LIBOR Telerate. In addition, if the
Designated LIBOR Page by its terms provides only for a single rate, that
single rate will be used regardless of the foregoing provisions requiring more
than one rate.

On any Interest Determination Date on which fewer than the required
number of applicable rates appear or no rate appears on the applicable
Designated LIBOR Page, the calculation agent will determine LIBOR as follows:

.LIBOR will be determined on the basis of the offered rates at which
deposits in the Designated LIBOR Currency having the Index
Maturity described in the applicable pricing supplement on the,
commencing on the applicable Interest Reset Date and in a
principal amount that is representative of a single transaction in
that market at that time are offered by four major banks (which
may include affiliates of the agents) in the London interbank
market at approximately 11:00 A.M., London time, on the Interest
Determination Date to prime banks in the London interbank market.
The calculation agent, after consultation with us, will select the
four banks and request the principal London office of each of
those banks to provide a quotation of its rate. If at least two
quotations are provided, LIBOR for that Interest Determination
Date will be the arithmetic mean of those quotations.

.If fewer than two quotations are provided as mentioned above, LIBOR
will be the arithmetic mean of the rates by three major banks
(which may include affiliates of the agents) in the Principal
Financial Center quoted at approximately 11:00 A.M. in the
Principal Financial Center, on the Interest Determination Date for
loans in the Designated LIBOR Currency to leading European banks,
having the Index Maturity specified in the applicable pricing
supplement and in a principal amount that is representative for a
single transaction in the Designated LIBOR Currency in that market
at that time. The calculation agent, after consultation with us,
will select the three banks referred to above.

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.If fewer than three banks selected by the calculation agent are
quoting as mentioned above, LIBOR will remain LIBOR then in effect
on the Interest Determination Date.

Prime Rate. The "Prime Rate" for any Interest Determination Date is the
rate on that date, as published in H.15(519) by 3:00 P.M., New York City time,
on the Calculation Date for that Interest Determination Date under the caption
"Bank Prime Loan."

The following procedures will be followed if the Prime Rate cannot be
determined as described above:

.If the rate is not published by 3:00 P.M., New York City time, on the
Calculation Date, the Prime Rate will be the rate as published in
H.15 Daily Update, or another recognized electronic source used for
the purpose of displaying that rate, under the caption "Bank Prime
Loan."

.If that rate is not published in H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on
the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each
bank that appears on the Reuters Screen US PRIME 1 Page as that
bank's prime rate or base lending rate as of 11:00 A.M., New York
City time, on that Interest Determination Date.

.If fewer than four rates appear on the Reuters Screen US PRIME 1 Page
on the Interest Determination Date, then the Prime Rate shall be
the arithmetic mean of the prime rates or base lending rates quoted
on the basis of the actual number of days in the year divided by a
360-day year as of the close of business on the Interest
Determination Date by three major banks (which may include
affiliates of the Agents) in The City of New York. The calculation
agent, after consultation with us, will select the three banks
referred to above.

.If the banks or trust companies selected by the calculation agent are
not quoting as mentioned above, the Prime Rate will remain the
Prime Rate in effect on the Interest Determination Date.

Treasury Rate. The "Treasury Rate" for any Interest Determination Date is
the rate set at the auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable
pricing supplement displayed on Telerate Page 56 or Telerate Page 57 by 3:00
P.M., New York City time, on the Calculation Date for that Interest
Determination Date, under the caption "INVESTMENT RATE."

The following procedures will be followed if the Treasury Rate cannot be
determined as described above:

.If the rate is not displayed on the relevant page or published in
H.15(519) by 3:00 P.M., New York City time, on the Calculation
Date, the Treasury Rate will be the auction average rate of such
Treasury bills (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of
the Treasury on the Calculation Date.

.If the results of the most recent auction of Treasury bills having
the Index Maturity specified in the applicable pricing supplement
are not published or announced as described above by 3:00 P.M., New
York City time, on the Calculation Date, or if no auction is held,
then the Treasury Rate will be the rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) on the Interest
Determination Date of Treasury bills having the Index Maturity
specified in the applicable pricing supplement as published in
H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market".

.If that rate is not yet published by 3:00 P.M., New York City time,
on the Calculation Date, the rate on the Interest Determination
Date of such Treasury bills will be the rate as

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published in H.15 Daily Update, or another recognized electronic
source used for the purpose of displaying such rate, under the
caption "U.S. Government Securities/Treasury Bills/Secondary
Market."

.If the rate is not published in, H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on
the Calculation Date, then the Treasury Rate will be calculated by
the calculation agent and will be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M.,
New York City time, on the Interest Determination Date, of three
primary United States government securities dealers (which may
include the agents or their affiliates) for the issue of Treasury
bills with a remaining maturity closest to the Index Maturity
specified in the applicable pricing supplement. The calculation
agent, after consultation with us, will select the three dealers
referred to above.

.If fewer than three dealers selected by the calculation agent are
quoting as mentioned above, the Treasury Rate will remain the
Treasury Rate in effect on that Interest Determination Date.

Indexed Notes

We may offer indexed notes under which principal or interest is
determined by reference to an index related to:

.the rate of exchange between the specified currency for that note
and the Designated LIBOR Currency;

.the difference in the price of a specified commodity on specified
dates;

.the difference in the level of a specified stock index, which may be
based on U.S. or foreign stocks, on specified dates; or

.any other objective price or economic measures described in the
pricing supplement.

We will describe the manner of determining principal and interest amounts
in the pricing supplement. We will also include historical and other
information regarding the index or indexes and information concerning tax
consequences to holders of indexed notes.

Interest payable on an indexed note will be based on the face amount of
the note. The pricing supplement will describe whether the principal payable
upon redemption or repayment prior to Maturity will be the face amount, the
index principal amount at the time of redemption or repayment or some other
amount.

As we have described earlier on page S-4, we think an investment in
indexed notes carries significant risks. You should review these risks and the
terms of an indexed note with your financial and legal advisors to determine
whether these notes are an appropriate investment for you.

Amortizing Notes

We may offer amortizing notes with amounts of principal and interest
payable in installments over the term of the notes. Unless otherwise specified
in the applicable pricing supplement, interest on an amortizing note will be
computed on the basis of a 360-day year of twelve 30-day months. Payments on
amortizing notes will be applied first to interest due and payable thereon and
then to the reduction of the unpaid principal amount. Further information about
amortizing notes, including an amortization schedule, will be included in the
pricing supplement.

Original Issue Discount Notes

We may issue Original Issue Discount Notes. Original Issue Discount Notes
are notes issued at a discount from the principal amount payable at Maturity.
Certain additional considerations relating to Original Issue Discount Notes may
be described in the pricing supplement.

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Floating Rate/Fixed Rate Notes

A note may be a floating rate note for a portion of its term and a fixed
rate note for a portion of its term. Under these circumstances, the interest
rate on the note will be determined as if it were a floating rate note and a
fixed rate note for each specified period, as shall be set out in the
applicable pricing supplement.

Inverse Floating Rate Notes

We may issue inverse floating rate notes. Inverse floating rate notes
will bear interest at a rate that reflects the difference between a fixed
interest rate and an interest rate basis or bases, as shall be set out in the
applicable pricing supplement.

Other Provisions; Addenda

We may modify any provision of a note by using the section marked "Other
Provisions" or by providing an addendum to the note.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of the principal United States Federal income
tax consequences relating to your purchase, ownership and sale of the notes. It
is based upon the relevant laws, regulations, rulings and decisions which are
now in effect and as they are currently interpreted. However, these laws and
rules may be changed (including changes in effective dates) at any time and may
be subject to possible differing interpretations. This discussion does not deal
with the federal tax consequences applicable to all categories of investors. In
particular, the discussion deals only with notes held as capital assets and
does not deal with those of you who may be in special tax situations, such as
financial institutions, insurance companies, regulated investment companies,
dealers in securities or currencies, persons holding notes as a hedge against
currency risks or as a position in a "straddle" for tax purposes, or persons
whose functional currency is not the United States dollar. It also does not
deal with holders other than original purchasers (except where otherwise
specifically noted). It does not include any description of the tax laws of any
state or local governments, or of any foreign government, that may be
applicable to the notes or to you as holders of the notes. This summary also
may not apply to all forms of notes that we may issue. If the tax consequences
associated with a particular form of note are different than those described
below, they will be discussed in the pricing supplement relating to that note.

The federal income tax discussion that appears below is included in this
prospectus supplement for your general information. Some or all of the
discussion may not apply to you depending upon your particular situation. You
should consult your tax advisor for the tax consequences to you of owning and
disposing of the notes, including the tax consequences under state, local,
foreign and other tax laws and the possible effects of changes in federal or
other tax laws.

This discussion is divided into four sections. The section captioned
"U.S. Holders," applies to you only if you are a "U.S. Holder." If you are a
U.S. Holder, you should read the section captioned "U.S. Holders." If you are
not a U.S. Holder, you should read the section captioned "Non-U.S. Holders."
All of you should read the section captioned "Backup Withholding." If the notes
you have purchased are foreign currency notes, you should read the section
captioned "Foreign Currency Notes."

Foreign Currency Notes

Unless otherwise specified in the applicable pricing supplement, foreign
currency notes will not be sold in, or to residents of, the country issuing the
specified currency. The information set forth in this prospectus supplement
relating to foreign currency notes is directed to prospective purchasers who
are United

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<PAGE>

States residents and, with respect to foreign currency notes, is by necessity
incomplete. We and the agents disclaim any responsibility to advise prospective
purchasers who are residents of countries other than the United States with
respect to any matters that may affect the purchase, holding or receipt of
payments of principal of, and premium, if any, and interest, if any, on,
foreign currency notes. Such persons should consult their own financial and
legal advisors with regard to such matters. See "Risk Factors--Exchange Rates
and Exchange Controls" on page S-3.

U.S. Holders

As used herein, the term "U.S. Holder" means a beneficial owner of a note
that is for United States federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation or partnership (including an entity
treated as a corporation or partnership for United States federal income tax
purposes) created or organized in or under the laws of the United States, any
state thereof or the District of Columbia (unless, in the case of a
partnership, Treasury regulations are adopted that provide otherwise), (iii) an
estate whose income is subject to United States federal income tax regardless
of its source or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as United States persons under the United States Internal
Revenue Code of 1986, as amended (the "Code") and applicable Treasury
regulations thereunder prior to that date, that elect to continue to be treated
as United States persons under the Code or applicable Treasury regulations
thereunder also will be a U.S. Holder. Moreover, as used herein, the term "U.S.
Holder" includes any holder of a note whose income or gain in respect to its
investment in a note is effectively connected with the conduct of a U.S. trade
or business. As used herein, the term "non-U.S. Holder" means a beneficial
owner of a note that is not a U.S. Holder.

Payments of Interest. Payments of interest on a note generally will be
taxable to you as ordinary interest income at the time such payments are
accrued or are received (in accordance with your regular method of tax
accounting).

Original Issue Discount. Some of your notes may be issued as Original
Issue Discount Notes. The following summary is based upon final Treasury
regulations released by the Internal Revenue Service on January 27, 1994, as
amended on June 11, 1996, under the original issue discount provisions of the
Code. These regulations are referred to as the "OID Regulations" in this
discussion.

For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of
1% of the note's stated redemption price at maturity multiplied by the number
of complete years to its maturity from its issue date or, in the case of a note
providing for the payment of any amount other than qualified stated interest
(as defined below) prior to maturity, multiplied by the weighted average
maturity of such note). The issue price of each note in an issue of notes
equals the first price at which a substantial amount of such notes has been
sold (ignoring sales to bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents, or
wholesalers). The stated redemption price at maturity of a note is the sum of
all payments provided by the note other than "qualified stated interest"
payments. The term "qualified stated interest" generally means stated interest
that is unconditionally payable in cash or property (other than debt
instruments of the issuer) at least annually at a single fixed rate. In
addition, under the OID Regulations, if a note bears interest for one or more
accrual periods at a rate below the rate applicable for the remaining term of
such note (e.g., notes with teaser rates or interest holidays), and if the
greater of either the resulting foregone interest on such note or any "true"
discount on such note (i.e., the excess of the note's stated principal amount
over its issue price) equals or exceeds a specified de minimis amount, then the
stated interest on the note would be treated as original issue discount rather
than qualified stated interest.

You are required to include payments of qualified stated interest on a
note as ordinary interest income when you accrue or receive those payments
accrued or are received (in accordance with your regular method of

S-21
<PAGE>

tax accounting). If you hold an Original Issue Discount Note, you must include
original issue discount in income as ordinary interest for United States
federal income tax purposes as it accrues under a constant yield method in
advance of receipt of the cash payments attributable to such income, regardless
of your regular method of tax accounting. If you are the initial purchaser of
an Original Issue Discount Note, the amount of original issue discount you
should include in income is the sum of the daily portions of original issue
discount for the Original Issue Discount Note for each day during the taxable
year (or portion of the taxable year) in which you held the Original Issue
Discount Note. The daily portion is determined by allocating to each day in any
accrual period a ratable portion of the original issue discount allocable to
that accrual period. An accrual period may be of any length and the accrual
periods may vary in length over the term of the Original Issue Discount Note,
provided that each accrual period is no longer than one year and each scheduled
payment of principal or interest occurs either on the first day of an accrual
period or on the final day of an accrual period. The amount of original issue
discount allocable to each accrual period is generally equal to the difference
between (1) the product of the Original Issue Discount Note's adjusted issue
price at the beginning of such accrual period and its yield to maturity
(computed on the basis of compounding at the close of each accrual period,
taking into account the length of the particular accrual period) and (2) the
amount of any qualified stated interest payments allocable to the accrual
period. The "adjusted issue price" of an Original Issue Discount Note at the
beginning of any accrual period is the sum of the issue price of the Original
Issue Discount Note plus the amount of original issue discount allocable to all
prior accrual periods reduced by any payments you received on the Original
Issue Discount Note that were not qualified stated interest payments. Under
these rules, you generally will have to include in income increasingly greater
amounts of original issue discount in successive accrual periods.

If you purchase an Original Issue Discount Note for an amount that is
greater than its adjusted issue price as of the purchase date and less than or
equal to the sum of all amounts payable on the Original Issue Discount Note
after the purchase date other than payments of qualified stated interest, you
will be considered to have purchased the Original Issue Discount Note at an
"acquisition premium." Under the acquisition premium rules, the amount of
original issue discount which you must include in your gross income for the
note in any taxable year (or any portion of a taxable year in which you hold
the note) will be reduced (but not below zero) by the portion of the
acquisition premium properly allocable to the period.

Special rules described in the next three paragraphs apply to the
calculation of original issue discount and qualified stated interest for
floating rate notes and indexed notes ("Variable Notes") which qualify as a
"variable rate debt instruments." A Variable Note qualifies as a "variable rate
debt instrument" if (1) its issue price does not exceed the total noncontingent
principal payments due under the Variable Note by more than a specified de
minimis amount and (2) it provides for stated interest, paid or compounded at
least annually, at current values of (a) one or more qualified floating rates,
(b) a single fixed rate and one or more qualified floating rates, (c) a single
objective rate, or (d) a single fixed rate and a single objective rate that is
a qualified inverse floating rate.

A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure current changes in the
cost of newly borrowed funds in the currency in which the Variable Note is
denominated. For example, the Commercial Paper Rate, the Federal Funds Rate,
LIBOR, the Prime Rate, the Treasury Rate, the CMT Rate or the Eleventh District
Cost of Funds Rate are qualified floating rates. Although a multiple of a
qualified floating rate will generally not itself be a qualified floating rate,
a variable rate equal to the product of a qualified floating rate and a fixed
multiple that is greater than .65 but not more than 1.35 will be a qualified
floating rate. A variable rate equal to the product of a qualified floating
rate and a fixed multiple that is greater than .65 but not more than 1.35,
increased or decreased by a fixed rate, will also be a qualified floating rate.
In addition, under the OID Regulations, two or more qualified floating rates
that can reasonably be expected to have approximately the same values
throughout the term of the Variable Note (e.g., two or more qualified floating
rates with values within 25 basis points of each other as determined on the
Variable Note's issue date) will be treated as a single qualified floating
rate. However, a variable rate that would otherwise constitute a qualified
floating rate but which is subject to one or more restrictions such as a
maximum numerical limitation (i.e., a cap) or a minimum numerical limitation
(i.e.,

S-22
<PAGE>

a floor) may, under certain circumstances, fail to be treated as a qualified
floating rate under the OID Regulations unless such cap or floor is fixed
throughout the term of the note. An "objective rate" is a rate that is not
itself a qualified floating rate but which is determined using a single fixed
formula and that is based on objective financial or economic information. A
rate will not qualify as an objective rate if it is based on information that
is within our control (or the control of a party related to us) or that is
unique to our circumstances (or that of a related party), such as dividends,
profits, or the value of our stock (although a rate does not fail to be an
objective rate merely because it is based on the credit quality). A "qualified
inverse floating rate" is any objective rate which is equal to a fixed rate
minus a qualified floating rate, as long as changes in the rate can reasonably
be expected to inversely reflect current changes in the qualified floating
rate. If a Variable Note provides for stated interest at a fixed rate for an
initial period of one year or less followed by a variable rate that is either a
qualified floating rate or an objective rate and if the variable rate on the
Variable Note's issue date is intended to approximate the fixed rate (that is,
the value of the variable rate on the issue date does not differ from the value
of the fixed rate by more than 25 basis points), then the fixed rate and the
variable rate together will be either a single qualified floating rate, or an
objective rate.

If a Variable Note that provides for stated interest at either a single
qualified floating rate or a single objective rate throughout the term thereof
qualifies as a "variable rate debt instrument," and if the interest on such
Note is unconditionally payable in cash or property (other than our debt
instruments) at least annually, then all stated interest on the Note will
constitute qualified stated interest and will be taxed accordingly. Thus, a
Variable Note that provides for stated interest at either a single qualified
floating rate or a single objective rate throughout its term and that qualifies
as a "variable rate debt instrument" will generally not be treated as having
been issued with original issue discount unless the Variable Note is issued at
a "true" discount (that is, at a price below the note's stated principal
amount) in excess of a specified de minimis amount. The amount of qualified
stated interest and the amount of original issue discount, if any, that accrues
during an accrual period on such a Variable Note is determined under the rules
applicable to fixed rate debt instruments by assuming that the variable rate is
a fixed rate equal to (1) in the case of a qualified floating rate or qualified
inverse floating rate, the value, as of the issue date, of the qualified
floating rate or qualified inverse floating rate, or (2) in the case of an
objective rate (other than a qualified inverse floating rate), a fixed rate
that reflects the yield that is reasonably expected for the Variable Note. The
qualified stated interest allocable to an accrual period is increased (or
decreased) if the interest actually paid during an accrual period exceeds (or
is less than) the interest assumed to be paid during the accrual period under
the assumed fixed rate described above.

In general, any other Variable Note that qualifies as a "variable rate
debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original issue
discount and qualified stated interest on the Variable Note. The Variable Note
generally will be converted into an "equivalent" fixed rate debt instrument by
substituting any qualified floating rate or qualified inverse floating rate
provided for under the terms of the Variable Note with a fixed rate equal to
the value of the qualified floating rate or qualified inverse floating rate, as
the case may be, as of the Variable Note's issue date. Any objective rate
(other than a qualified inverse floating rate) provided for under the terms of
the Variable Note is converted into a fixed rate that reflects the yield that
is reasonably expected for the Variable Note. In the case of a Variable Note
that qualifies as a "variable rate debt instrument" and provides for stated
interest at a fixed rate in addition to either one or more qualified floating
rates or a qualified inverse floating rate, the fixed rate is initially
converted into a qualified floating rate (or a qualified inverse floating rate,
if the Variable Note provides for a qualified inverse floating rate). Under
such circumstances, the qualified floating rate or qualified inverse floating
rate that replaces the fixed rate must be such that the fair market value of
the Variable Note as of the Variable Note's issue date is approximately the
same as the fair market value of an otherwise identical debt instrument that
provides for either the qualified floating rate or qualified inverse floating
rate rather than the fixed rate. After converting the fixed rate into either a
qualified floating rate or a qualified inverse floating rate, the Variable Note
is then converted into an "equivalent" fixed rate debt instrument in the manner
described above.

Once the Variable Note is converted into an "equivalent" fixed rate debt
instrument pursuant to the foregoing rules, the amount of original issue
discount and qualified stated interest, if any, are determined for

S-23
<PAGE>

the "equivalent" fixed rate debt instrument by applying the general original
issue discount rules to the "equivalent" fixed rate debt instrument. In that
case, if you are a holder of the Variable Note, for tax purposes you will
account for the amount of original issue discount and qualified stated interest
as if you held the "equivalent" fixed rate debt instrument. Each accrual
period, you must make appropriate adjustments to the amount of qualified stated
interest or original issue discount computed for the "equivalent" fixed rate
debt instrument to reflect any difference between those amounts and the actual
amount of interest accrued or paid on the Variable Note during the accrual
period.

If a Variable Note does not qualify as a "variable rate debt instrument,"
then the Variable Note may be treated as a contingent payment debt obligation
subject to other special rules. You should be aware that on June 11, 1996, the
Treasury Department issued final regulations (the "CPDI Regulations")
concerning the proper United States Federal income tax treatment of contingent
payment debt instruments. In general, the CPDI Regulations would cause the
timing and character of income, gain or loss reported on a contingent payment
debt instrument to substantially differ from the timing and character of
income, gain or loss reported on a contingent payment debt instrument under
general principles of current United States Federal income tax law.
Specifically, if you hold such an instrument the CPDI Regulations generally
require you to include future contingent and noncontingent interest payments in
income as such interest accrues based upon a projected payment schedule.
Moreover, in general, under the CPDI Regulations, any gain you recognized on
the sale, exchange, or retirement of a contingent payment debt instrument will
be treated as ordinary income and all or a portion of any loss realized could
be treated as ordinary loss as opposed to capital loss (depending upon the
circumstances). The CPDI Regulations apply to debt instruments issued on or
after August 13, 1996. The proper United States Federal income tax treatment of
Variable Notes that are treated as contingent payment debt obligations will be
more fully described in the applicable pricing supplement. Furthermore, any
other special United States Federal income tax considerations, not otherwise
discussed herein, which are applicable to any particular issue of Notes will be
discussed in the applicable pricing supplement.

If notes are:

.redeemable at our option prior to their stated maturity (a "call
option"), or

.repayable at your option prior to their stated maturity (a "put
option"),

they may be subject to rules that differ from the general rules discussed
above. If you are purchasing notes with such features you should consult your
tax advisor, because the original issue discount consequences will depend, in
part, on the particular terms and features of the purchased notes.

Instead of reporting under your normal accounting method, you may elect
to include in gross income all interest (including stated interest,
acquisitions discount, original issue discount, de minimis original issue
discount, market discount, de minimis market discount, and unstated interest,
as adjusted by any amortizable bond premium or acquisition premium) that
accrues on a note by using the constant yield method applicable to original
issue discount, subject to certain limitations and exceptions.

Short-Term Notes. Some of you (including banks, securities dealers,
regulated investment companies, certain electing taxpayers and all of you using
the accrual method of accounting) will be required to accrue into income on a
current basis qualified stated interest and any original issue discount for
notes having a fixed maturity of not more than one year ("Short-Term Notes").
None of the stated interest on a Short-Term Note is treated as qualified stated
interest, but instead if treated as part of the Short-Term Note's stated
redemption price at maturity and gives rise to original issue discount.
Original issue discount on a Short-Term Note generally accrues on a straight-
line basis or, at your election, on a constant interest basis. If you are a
cash method holder of a Short-Term Note, you may elect to accrue qualified
stated interest and original issue discount into income on a current basis. If
you do not make that election, you may not be allowed to deduct all of the
interest you paid or accrued on any indebtedness you incur or purchase or carry
the Short-Term Note until the maturity date of the note or until you sell the
note in a taxable transaction. In addition, if you do not make that election,
you will be required to treat any gain realized on a sale, exchange or
retirement of the

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<PAGE>

Short-Term Note as ordinary income to the extent the gain does not exceed the
original issue discount accrued for the note during the period you held the
Short-Term Note. In determining original issue discount for these purposes,
original issue discount generally accrues on a straight-line basis, or at your
election, on a constant interest basis.

If you hold a Short-Term Note, you can elect to apply the rules in the
preceding paragraph about the current accrual of original issued discount and
the deferral of interest deductions by taking into account the amount of
"acquisition discount," if any, for the note (rather than the amount of
original issue discount, if any, for that Short-Term Note). Acquisition
discount is the excess of the remaining stated redemption price at maturity of
the Short-Term Note over your tax basis in the Short-Term Note at the time of
the acquisition. Acquisition discount generally accrues on a straight-line
basis or, at your election, on a constant interest basis.

Your tax basis for a Short-Term Note initially is your purchase price for
the note. This amount is increased by any stated interest, original issue
discount or acquisition discount that you accrue into income currently under
the rules described above, and is then decreased by the amount of any bond
premium you previously amortized for the note, the amount of any principal
payment you received for the note and, if you accrue interest into income
currently for the note, the amount of any stated interest payment you received
for the note.

The market discount rules will not apply to a Short-Term Note.

Market Discount. If you purchase a note, other than an Original Issue
Discount Note, for an amount that is less than its issue price (or, in the case
of a subsequent purchaser, its stated redemption price at maturity) or, in the
case of an Original Issue Discount Note, for an amount that is less than its
adjusted issue price as of the purchase date, you will be treated as having
purchased such note at a "market discount," unless such market discount is less
than a specified de minimis amount.

Under the market discount rules, you will be required to treat any
partial principal payment (or, in the case of an Original Issue Discount Note,
any payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, retirement or other disposition of, a note as
ordinary income to the extent of the lesser of (1) the amount of such payment
or realized gain or (2) the market discount which has not previously been
included in income and is treated as having accrued on such note at the time of
such payment or disposition. Market discount will be considered to accrue
ratably during the period from the date of acquisition to the maturity date of
the note, unless you elect to accrue market discount on the basis of semiannual
compounding.

You may be required to defer the deduction of all or a portion of the
interest paid or accrued on any indebtedness incurred or maintained to purchase
or carry a note with market discount until the maturity of the note or certain
earlier dispositions, because a current deduction is only allowed to the extent
the interest expense exceeds an allocable portion of market discount. You may
elect to include market discount in income currently as it accrues (on either a
ratable or semiannual compounding basis), in which case the rules described
above regarding the treatment as ordinary income of gain upon the disposition
of the note and upon the receipt of certain cash payments and regarding the
deferral of interest deductions will not apply. Generally, such currently
included market discount is treated as ordinary interest for United States
Federal income tax purposes. Such an election will apply to all debt
instruments you acquire on or after the first day of the first taxable year to
which such election applies and may be revoked only with the consent of the
IRS.

Premium. If you purchase a note for an amount that is greater than the
sum of all amounts payable on the note after the purchase date other than
payments of qualified stated interest, you will be considered to have purchased
the note with "amortizable bond premium" equal in amount to such excess. You
may elect to amortize such premium using a constant yield method over the
remaining term of the note and may offset interest otherwise required to be
included in respect of the note during any taxable year by the amortized amount
of such excess for the taxable year. However, if the note may be optionally
redeemed after you acquire

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<PAGE>

it at a price in excess of its stated redemption price at maturity, special
rules would apply which could result in a deferral of the amortization of some
bond premium until later in the term of the note. Any election to amortize bond
premium applies to all taxable debt instruments you acquire on or after the
first day of the first taxable year to which such election applies and may be
revoked only with the consent of the IRS.

Disposition of a Note. Except as discussed above, upon the sale, exchange
or retirement of a note, you generally will recognize taxable gain or loss
equal to the difference between the amount realized on the sale, exchange or
retirement (other than amounts representing accrued and unpaid interest) and
your adjusted tax basis in the note. Your adjusted tax basis in a note
generally will equal your initial investment in the note increased by any
original issue discount included in income (and accrued market discount, if
any, if you have included such market discount in income) and decreased by the
amount of any payments, other than qualified stated interest payments, received
and amortizable bond premium taken with respect to such note. Such gain or loss
generally will be long-term capital gain or loss if the note were held for more
than the applicable holding period. Non-corporate taxpayers are subject to
reduced maximum rates on long-term capital gains and are generally subject to
tax at ordinary income rates on short-term capital gains. The deductibility of
capital losses is subject to certain limitations. Prospective investors should
consult their own tax advisors concerning these tax law provisions.

Non-U.S. Holders

This section discusses the principal United States tax consequences
applicable to Non-U.S. Holders of purchasing, owning and selling of notes.

You will not be subject to United States Federal income taxes on payments
of principal, premium (if any) or interest (including original issue discount,
if any) on a note, unless you are a direct or indirect 10% or greater
shareholder of the Company, a controlled foreign corporation related to us or a
bank receiving interest described in section 881(c)(3)(A) of the Code. To
qualify for the exemption from taxation, the last United States payor in the
chain of payment prior to payment to you (the "Withholding Agent") must have
received in the year in which a payment of interest or principal occurs, or in
either of the two preceding calendar years, a statement that:

(1) is signed by the beneficial owner of the note under penalties of
perjury,

(2) certifies that such owner is not a U.S. Holder, and

(3) provides the name and address of the beneficial owner.

The statement may be made on an IRS Form W-8 or a substantially similar
form, and the beneficial owner must inform the Withholding Agent of any change
in the information on the statement within 30 days of such change. If a Note is
held through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement to
the Withholding Agent. However, in such case, the signed statement must be
accompanied by a copy of the IRS Form W-8 or the substitute form provided by
the beneficial owner to the organization or institution. The Treasury
Department is considering implementation of further certification requirements
aimed at determining whether the issuer of a debt obligation is related to
holders thereof.

New rules have been issued to consolidate and modify the current
certification requirements and means by which you may claim exemption from
United States federal income tax withholding and from backup withholding. These
rules will apply to payments made after December 31, 2000 and provide certain
presumptions regarding your tax status if you do not provide appropriate
documentation to make this determination. You must provide certification that
complies with the procedures in these new rules, where required, by the first
payment date after these rules come into effect. In some circumstances, the new
rules allow us to continue to rely on certificates you provided us before
January 1, 2001 for a transitional period. If you are claiming benefits under
an income tax treaty, you may be required to obtain a taxpayer identification

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<PAGE>

number and to certify your eligibility under the applicable treaty's
limitations on benefits articles in order to comply with the new rules. Because
these rules may apply differently to different holders, you are urged to
consult your tax advisor regarding the application of these rules to you.

Generally, you will not be subject to Federal income taxes on any capital
gain or market discount you realize upon retirement or disposition of a note if
the gain is not effectively connected with a trade or business in the United
States conducted by you. Certain other exceptions may be applicable, and you
should consult your tax advisor in this regard.

The notes will not be includible in your estate unless you are a direct
or indirect 10% or greater shareholder of Comdisco or, at the time of your
death, payments in respect of the notes would have been effectively connected
with your conduct of a trade or business in the United States.

Backup Withholding

The payment of principal and interest and the accrual of original issue
discount, if any, are generally subject to information reporting and possibly
to "backup withholding" at a rate of 31%. Information reporting means that the
payment is required to be reported to you and to the IRS. Backup withholding
means that the payor is required to collect and deposit 31% of your payment
with the IRS as a tax payment on your behalf.

If you are a U.S. Holder (other than a corporation or certain exempt
organizations), you may be subject to backup withholding if you do not supply
an accurate taxpayer identification number and certify that your taxpayer
identification number is correct. You may also be subject to backup withholding
if the United States Secretary of the Treasury determines that you have not
reported all interest and dividend income required to be shown on your federal
income tax return or if you do not certify that you have not underreported your
interest and dividend income. If you are not U.S. Holder, backup withholding
and information reporting will not apply to payments made to you if you have
provided required certification that you are not a U.S. Holder, or you
otherwise establish an exemption (provided that the payor does not have actual
knowledge that you are U.S. Holder or that the conditions of any exemption are
not satisfied).

Payment of the proceeds from a sale of a note to or through the United
States office of a broker is subject to information reporting and backup
withholding, unless you certify as to your non-U.S. status or otherwise
establish an exemption from information reporting and backup withholding.

Special rules apply with respect to payment of the proceeds from the sale
of a note to or through a foreign office of a broker, and you should consult
your tax advisor if you find yourself in this circumstance.

Any amounts withheld from your payment under the backup withholding rules
would be refundable or allowable as a credit against your United States federal
income tax liability.

Foreign Currency Notes

As used herein, "foreign currency" means a currency other than U.S.
dollars.

Payments of Interest in a Foreign Currency

Cash Method. A U.S. Holder who uses the cash method of accounting for
United States Federal income tax purposes and who receives a payment of
interest on a note (other than original issue discount or market discount) will
be required to include in income the U.S. dollar value of the foreign currency
payment (determined on the date such payment is received) regardless of whether
the payment is in fact converted to U.S. dollars at that time, and such U.S.
dollar value will be the U.S. Holder's tax basis in such foreign currency.

Accrual Method. A U.S. Holder who uses the accrual method of accounting
for United States Federal income tax purposes, or who otherwise is required to
accrue interest prior to receipt, will be required to include

S-27
<PAGE>

in income the U.S. dollar value of the amount of interest income (including
original issue discount or market discount and reduced by amortizable bond
premium to the extent applicable) that has accrued and is otherwise required to
be taken into account with respect to a note during an accrual period. The U.S.
dollar value of such accrued income will be determined by translating such
income at the average rate of exchange for the accrual period or, with respect
to an accrual period that spans two taxable years, at the average rate for the
partial period within the taxable year. A U.S. Holder may elect, however, to
translate such accrued interest income using the rate of exchange on the last
day of the accrual period or, with respect to an accrual period that spans two
taxable years, using the rate of exchange on the last day of the taxable year.
If the last day of an accrual period is within five business days of the date
of receipt of the accrued interest, a U.S. Holder may translate such interest
using the rate of exchange on the date of receipt. The above election will
apply to other debt obligations held by the U.S. Holder and may not be changed
without the consent of the IRS. A U.S. Holder should consult a tax advisor
before making the above election. A U.S. Holder will recognize exchange gain or
loss (which will be treated as ordinary income or loss) with respect to accrued
interest income on the date such income is received. The amount of ordinary
income or loss recognized will equal the difference, if any, between the U.S.
dollar value of the foreign currency payment received (determined on the date
such payment is received) in respect of such accrual period and the U.S. dollar
value of interest income that has accrued during such accrual period (as
determined above).

Purchase, Sale and Retirement of Notes. A U.S. Holder who purchases a
note with previously owned foreign currency will recognize ordinary income or
loss in an amount equal to the difference, if any, between such U.S. Holder's
tax basis in the foreign currency and the U.S. dollar fair market value of the
foreign currency used to purchase the Note, determined on the date of purchase.

Except as discussed above with respect to Short-Term Notes, upon the
sale, exchange or retirement of a note, a U.S. Holder will recognize taxable
gain or loss equal to the difference between the amount realized on the sale,
exchange or retirement and such U.S. Holder's adjusted tax basis in the note.
Such gain or loss generally will be capital gain or loss (except to the extent
of any accrued market discount not previously included in the U.S. Holder's
income) and will be long-term capital gain or loss if at the time of sale,
exchange or retirement the note has been held by such U.S. Holder for more than
one year. To the extent the amount realized represents accrued but unpaid
interest, however, such amounts must be taken into account as interest income,
with exchange gain or loss computed as described in "Payments of Interest in a
Foreign Currency" above. If a U.S. Holder receives foreign currency on such a
sale, exchange or retirement the amount realized will be based on the U.S.
dollar value of the foreign currency on the date the payment is received or the
note is disposed of (or deemed disposed of as a result of a material change in
the terms of the note). In the case of a note that is denominated in foreign
currency and is traded on an established securities market, a cash basis U.S.
Holder (or, upon election, an accrual basis U.S. Holder) will determine the
U.S. dollar value of the amount realized by translating the foreign currency
payment at the spot rate of exchange on the settlement date of the sale. A U.S.
Holder's adjusted tax basis in a note will equal the cost of the note to such
holder, increased by the amounts of any market discount or original issue
discount previously included in income by the holder with respect to such note
and reduced by any amortized acquisition or other premium and any principal
payments received by the holder. A U.S. Holder's tax basis in a note, and the
amount of any subsequent adjustments to such holder's tax basis, will be the
U.S. dollar value of the foreign currency amount paid for such note, or of the
foreign currency amount of the adjustment, determined on the date of such
purchase or adjustment.

Gain or loss realized upon the sale, exchange or retirement of a note
that is attributable to fluctuations in currency exchange rates will be
ordinary income or loss which will not be treated as interest income or
expense. Gain or loss attributable to fluctuations in exchange rates will equal
the difference between the U.S. dollar value of the foreign currency principal
amount of the note, determined on the date such payment is received or the note
is disposed of, and the U.S. dollar value of the foreign currency principal
amount of the note, determined on the date the U.S. Holder acquired the Note.
Such foreign currency gain or loss will be recognized only to the extent of the
total gain or loss realized by the U.S. Holder on the sale, exchange or
retirement of the note.

S-28
<PAGE>

Original Issue Discount. In the case of an Original Issue Discount Note
or Short-Term Note, (1) original issue discount is determined in units of the
foreign currency, (2) accrued original issue discount is translated into U.S.
dollars as described in "Payments of Interest in a Foreign Currency--Accrual
Method" above and (3) the amount of foreign currency gain or loss on the
accrued original issue discount is determined by comparing the amount of income
received attributable to the discount (either upon payment, maturity or an
earlier disposition), as translated into U.S. dollars at the rate of exchange
on the date of such receipt, with the amount of original issue discount
accrued, as translated above.

Premium and Market Discount. In the case of a note with market discount,
(1) market discount is determined in units of the foreign currency, (2) accrued
market discount taken into account upon the receipt of any partial principal
payment or upon the sale, exchange, retirement or other disposition of the note
(other than accrued market discount required to be taken into account
currently) is translated into U.S. dollars at the exchange rate on such
disposition date (and no part of such accrued market discount is treated as
exchange gain or loss) and (3) accrued market discount currently includible in
income by a U.S. Holder for any accrual period is translated into U.S. dollars
on the basis of the average exchange rate in effect during such accrual period,
and the exchange gain or loss is determined upon the receipt of any partial
principal payment or upon the sale, exchange, retirement or other disposition
of the note in the manner described in "Payments of Interest in a Foreign
Currency--Accrual Method" above with respect to computation of exchange gain or
loss on accrued interest.

With respect to a note acquired with amortizable bond premium, such
premium is determined in the relevant foreign currency and reduces interest
income in units of the foreign currency. Although not entirely clear, a U.S.
Holder should recognize exchange gain or loss equal to the difference between
the U.S. dollar value of the bond premium amortized with respect to a period,
determined on the date the interest attributable to such period is received,
and the U.S. dollar value of the bond premium determined on the date of the
acquisition of the note.

Exchange of Foreign Currencies. A U.S. Holder will have a tax basis in
any foreign currency received as interest or on the sale, exchange or
retirement of a note equal to the U.S. dollar value of such foreign currency,
determined at the time the interest is received or at the time of the sale,
exchange or retirement. Any gain or loss realized by a U.S. Holder on a sale or
other disposition of Foreign Currency (including its exchange for U.S. dollars
or its use to purchase notes) will be ordinary income or loss.

S-29
<PAGE>

PLAN OF DISTRIBUTION

We may sell the notes:

. through agents who solicit offers to purchase the notes,

. through agents purchasing as principal and acting as underwriters or
dealers, or

. directly to investors.

Distribution Through Agents

We may sell the notes on a continuing basis through agents that become
parties to a distribution agreement, a form of which is filed as an exhibit to
the Registration Statement. Each agent's obligations are separate and several
from those of any other agent. Each agent will use reasonable efforts when
requested by us to solicit purchases of the notes. We will pay each agent a
commission to be negotiated at the time of sale. The commission may range from
.125% to .750% (in the case of notes denominated in a currency other than U.S.
dollars) of the principal amount of each note sold through that agent. We will
receive from 99.875% to 99.250% of the principal amount of each note, before
deducting a portion of the aggregate offering expenses of approximately
$450,000.

Distribution Through Underwriters

We may also sell notes to any agent, acting as principal, for its own
account or for resale to one or more investors or other purchasers, including
other broker-dealers.

The agents may sell any notes they have purchased as principal to any
dealer at a discount. The discount allowed to any dealer will not be in excess
of the discount to be received by the agent from us. Unless we specify
otherwise in an applicable pricing supplement, any note sold to an agent as
principal is purchased by that agent at a price equal to 100% of the principal
amount of that note less a percentage ranging from .125% to .750% (in the case
of notes denominated in a currency other than U.S. dollars) of that principal
amount. The notes may be resold by the agent to investors and other purchasers
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, or the notes may be resold to certain dealers as described
above. After the initial public offering of any notes, the public offering
price and discount may be changed.

Direct Sales

We may sell notes directly to investors, without the involvement of any
agent or underwriter. In this case, we would not be obligated to pay any
commission or discount in connection with the sale.

General Information

The name of any agents or other persons through which we sell any notes,
as well as any commissions or discounts payable to those agents or other
persons, will be set forth in the related pricing supplement. As of the date of
this prospectus supplement, the agents who are a party to the distribution
agreement are Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc of America Securities LLC, Salomon Smith Barney Inc. and
Warburg Dillon Read LLC.

We will have the sole right to accept offers to purchase notes and may,
in our absolute discretion, reject any proposed purchase of notes in whole or
in part. Each agent will have the right, in its discretion reasonably
exercised, to reject in whole or in part any proposed purchase of notes through
it.

S-30
<PAGE>

Any agent, underwriter or dealer that participates in the offering of the
notes may be an "underwriter" within the meaning of the Securities Act. We have
agreed to indemnify each agent and certain other persons against certain
liabilities, including liabilities under the Securities Act. We have also
agreed to reimburse the agents for certain expenses.

We may also accept offers to purchase notes through additional agents on
substantially the same terms and conditions, including commissions, as would
apply to purchases by agents under the distribution agreement.

The notes will not be listed on any securities exchange. The agents have
advised us that they may purchase and sell the notes in the secondary market
from time to time. However, no agent is obligated to do so and any agent may
discontinue making a market in the notes at any time without notice. No
assurance can be given as to the existence of liquidity of any secondary market
for the notes.

Unless we specify otherwise in the applicable pricing supplement, you
will be required to pay the purchase price of the notes in immediately
available funds in the specified currency in The City of New York on the date
of settlement.

In connection with an offering of notes purchased by one or more agents
as principal on a fixed-priced basis, the agent(s) will be permitted to engage
in certain transactions that stabilize the price of these notes. These
transactions may consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of those notes. If the agent or agents creates
or create, as the case may be, a short position in these notes (i.e., if it
sells or they sell notes in an aggregate principal amount exceeding that set
forth in the applicable pricing supplement), the agent(s) may reduce that short
position by purchasing notes in the open market. In general, purchases of notes
for the purpose of stabilization or to reduce a short position could cause the
price of notes to be higher than it might be in the absence of these purchases.

Neither we nor any of the agents make any representation or prediction as
to the direction or magnitude of any effect that the transactions described
above may have on the price of the notes. In addition, neither we nor any of
the agents make any representation that the agents will engage in any of these
transactions or that these transactions, once commenced, will not be
discontinued without notice.

Debt securities having terms substantially similar to the terms of the
notes (but constituting a separate series of debt securities for purposes of
the SunTrust Senior Indenture) may be offered outside the United States by us
on a continuing basis, concurrently with offerings of the notes. We may also
sell notes or other debt securities pursuant to another prospectus supplement
to the accompanying prospectus.

The agents, as well as other agents to or through which we may sell
notes, may engage in transactions with us and perform services for us in the
ordinary course of business. Thomas H. Patrick, one of our directors, is an
Executive Vice President, Chief Financial Officer, Chairman of Special Advisory
Services and a member of the office of the Chairman, of Merrill Lynch & Co.,
Inc.

S-31
<PAGE>

GLOSSARY

Listed below are definitions of some of the terms used in this prospectus
supplement and not defined elsewhere in this prospectus supplement or in the
attached prospectus.

"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close in The City of New
York; provided, however, that, with respect to foreign currency notes, this day
is also not a day on which commercial banks are authorized or required by law,
regulation or executive order to close in the Principal Financial Center of the
country issuing the specified currency (or, if the specified currency is Euro,
this day is also a day on which the Trans-European Automated Real-Time Gross
Settlement Express Transfer (TARGET) System is open); provided, further, that,
with respect to notes as to which LIBOR is an applicable Interest Rate Basis,
this day is also a London Business Day.

"Calculation Date," means with respect to any Interest Determination
Date, the date on which the calculation agent calculates an interest rate for a
floating rate or indexed note. The Calculation Date for any Interest
Determination Date is the earlier of (1) the tenth calendar day after this
Interest Determination Date or, if that day is not a Business Day, the next
succeeding Business Day or (2) the Business Day immediately preceding the
applicable Interest Payment Date or maturity, as the case may be.

"Designated LIBOR Currency" means the currency specified in the
applicable pricing supplement as to which LIBOR shall be calculated or, if this
currency is not specified in the applicable pricing supplement, United States
dollars.

"Designated LIBOR Page" means:

.if "LIBOR Reuters" is specified in the applicable pricing
supplement, the display on the Reuter Monitor Money Rates Service
(or any successor service) on the page specified in that pricing
supplement (or any other page as may replace such page on that
service) for the purpose of displaying the London interbank rates
of major banks for the Designated LIBOR Currency, or

.if "LIBOR Telerate" is specified in the applicable pricing
supplement or neither "LIBOR Reuters" nor "LIBOR Telerate" is
specified in the applicable pricing supplement as the method for
calculating LIBOR, the Telerate Page specified in that pricing
supplement for the purpose of displaying the London interbank
rates of major banks for the Designated LIBOR Currency.

"Euro" means the lawful currency of the member states of the European
Union that adopt the single currency in accordance with the Treaty establishing
the European Communities, as amended.

"H.15(519)" means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.

"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal
Reserve System at http://www.bog.frb.fed.us/releases/h15/ update, or any
successor site or publication.

"Index Maturity" means the period to maturity of the instrument or
obligation with respect to which the related interest rate basis or bases will
be calculated.

"Interest Determination Date" means the following with respect to an
interest rate:

. The Interest Determination Date for the CMT Rate, the Commercial
Paper Rate and the Prime Rate will be the second Business Day
immediately preceding the applicable Interest Reset Date.

S-32
<PAGE>

. The Interest Determination Date for the Federal Funds Rate will be
the First Business Day immediately preceding the applicable
Interest Reset Date.

. The Interest Determination Date for the Eleventh District Cost of
Funds Rate will be the last working day of the month immediately
preceding the applicable Interest Reset Date on which the Federal
Home Loan Bank of San Francisco publishes the monthly weighted
average cost of funds paid by members of the Eleventh Federal Home
Loan Bank District.

. The Interest Determination Date for LIBOR will be the second
London Business Day immediately preceding the applicable Interest
Reset Date.

. The Interest Determination Date for the Treasury Rate will be the
day in the week in which the applicable Interest Reset Date falls
on which day Treasury bills would normally be auctioned. Treasury
bills are normally sold at an auction held on Monday of each week,
unless that day is a legal holiday, in which case the auction is
normally held on Tuesday. However, an auction may be held on the
preceding Friday. If an auction is held on the preceding Friday
that day will be the Interest Determination Date for the Interest
Reset Date occurring in the next week. If an auction date falls on
any Interest Reset Date, then the related Interest Reset Date will
instead be the first Business Day immediately following the
auction date.

. The Interest Determination Date pertaining to a floating rate note
the interest rate of which is determined by reference to two or
more interest rate bases will be the most recent Business Day
which is at least two Business Days prior to the applicable
Interest Reset Date for that floating rate note on which each
Interest Rate Basis is determinable. Each Interest Rate Basis will
be determined as of that date, and the applicable interest rate
will take effect on the applicable Interest Reset Date.

"Interest Payment Date" means the date on which interest on a note (other
than payment at Maturity) is paid. The Interest Payment Dates will be indicated
in the applicable pricing supplement.

"London Business Day" means a day on which commercial banks are open for
business (including dealings in the Designated LIBOR Currency) in London.

"Maturity" means the date on which the principal of a note or an
installment of principal becomes due and payable as provided in the note or in
the SunTrust Senior Indenture, whether at stated maturity or by declaration of
acceleration, call for redemption or otherwise.

"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:

<TABLE>
<S> <C> <C>
D x 360
Money Market Yield = x 100
360-(D x M)
</TABLE>

where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the applicable Interest Reset Period.

S-33
<PAGE>

"Original Issue Discount Note" means any note that provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to the SunTrust Senior
Indenture.

"Principal Financial Center" means (1) the capital city of the country
issuing the specified currency or (2) the capital city of the country to which
the Designated LIBOR Currency relates, as applicable, except, in the case of
(1) or (2) above, that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Portuguese escudos,
South African rand and Swiss francs, the "Principal Financial Center" shall be
The City of New York, Sydney and (solely in the case of the Specified Currency)
Melbourne, Toronto, Frankfurt, Amsterdam, London (solely in the case of the
Designated LIBOR Currency), Johannesburg and Zurich, respectively.

"Record Date" means the date on which you must hold a note in order to
receive an interest payment on the next Interest Payment Date. The record date
for any Interest Payment Date is the date 15 calendar days prior to that
Interest Payment Date.

"Redemption Price" means with respect to a note an amount equal to the
Initial Redemption Percentage specified in the applicable pricing supplement
(as adjusted by the annual redemption percentage reduction, if applicable)
multiplied by the unpaid principal amount to be redeemed. The Initial
Redemption Percentage, if any, applicable to a note shall decline at each
anniversary of the initial redemption date by an amount equal to the applicable
annual redemption percentage reduction, if any, until the Redemption Price is
equal to 100% of the unpaid principal amount to be redeemed.

"Reuters Screen US PRIME 1 Page" means the display on the Reuter Monitor
Money Rates Service, or any successor service, on the "US PRIME 1" page, or any
other page as may replace the US PRIME 1 page on that service, for the purpose
of displaying prime rates or base lending rates of major United States banks.

"Spread" means the number of basis points to be added to or subtracted
from the related interest rate basis or bases applicable to that floating rate
note. The spread will be indicated in the applicable pricing supplement.

"Spread Multiplier" means the percentage of the related interest rate
basis or bases applicable to such floating rate note by which that interest
rate basis or bases will be multiplied to determine the applicable interest
rate on that floating rate note. The spread multiplier will be indicated in the
applicable pricing supplement.

"Telerate Page" means the display on the Bridge Telerate Inc. on that
page (or any other page as may replace that page on that service).

S-34
<PAGE>

PROSPECTUS

- -------------------------------------------------------------------------------

[LOGO OF COMDISCO INC.]

COMDISCO, INC.
6111 N. River Road
Rosemont, Illinois 60018
(847) 698-3000

We will provide the specific terms
of each series or issue of debt
securities we issue in supplements
$1,500,000,000 to this prospectus. You should read
this prospectus and the supplements
carefully before you invest.

Debt Securities

We may offer the securities directly or through underwriters, agents or
dealers. The prospectus supplement will designate the terms of that plan of
distribution. "Plan of Distribution" below also provides more information on
this topic.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these debt securities or determined
if this prospectus or any accompanying prospectus supplement or pricing
supplement is truthful or complete. Any representation to the contrary is a
criminal offense.

February 29, 2000
<PAGE>

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement (SEC File No. 333-
87725) that we filed with the Securities and Exchange Commission utilizing a
"shelf" registration process. Under this shelf process, we may, from time to
time sell the combination of the debt securities described in this prospectus
in one or more offerings up to a total dollar amount of $1,500,000,000.

This prospectus provides you with a general description of the securities
we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also add, update or change information
contained in this prospectus.

You should read this prospectus and any prospectus supplement together
with additional information described under the next heading WHERE YOU CAN FIND
MORE INFORMATION.

WHERE YOU CAN FIND MORE INFORMATION

Comdisco files annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any document we file
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also accessible
through the Internet at our web site at http://www.comdisco.com and the SEC's
web site at http://www.sec.gov. You can also inspect reports and other
information we file at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.

The SEC allows us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and later information that we file with the SEC will 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 Securities Exchange Act of 1934 until our offering has been
completed.

. Annual Report on Form 10-K for the year ended September 30, 1999,
as amended by Form 10-K/A filed with the SEC on February 24, 2000;
and

. Quarterly Report on Form 10-Q for the quarter ended December 31,
1999, as amended by Form 10-Q/A filed with the SEC on or about
February 29, 2000.

. The descriptions of the Common Stock and related Common Stock
Purchase Rights included in the registration statements filed under
the Exchange Act under File No. 1-7725, including all amendments or
reports filed for the purpose of updating such description.

You may request a copy of these filings at no cost, by writing or calling
us at the following address:

Comdisco, Inc.
6111 N. River Road
Rosemont, IL 60018
(847) 698-3000
Attention: Corporate Secretary

You should rely only on the information incorporated by reference or
provided in this prospectus, any prospectus supplement or any pricing
supplement. We have not authorized anyone else to provide you with different
information. We are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should not assume
that the information in this prospectus, any prospectus supplement or any
pricing supplement is accurate as of any date other than the date on the front
of those documents.

2
<PAGE>

References in this prospectus to "Comdisco", "we", "us" and "our" are to
Comdisco, Inc., and its subsidiaries. References in this prospectus to "Prism"
are to our subsidiary, Prism Communication Services, Inc.

THE COMPANY

We provide global technology services to help our customers maximize
technology functionality, predictability and availability. We are aligned into
four primary business lines:

. Technology services,

. Leasing,

. Prism, and

. Ventures.

Our technology services include:

. Business continuity,

. Managed network services,

. Desktop management solutions, and

. Other services.

These services are designed to provide integrated, long-term, cost
effective asset and technological planning as well as data and voice
availability and recovery to users of high technology equipment.

We offer equipment leasing in the electronics, communications, medical
and laboratory and scientific industries and the financing of other high
technology equipment, including information technology equipment and industrial
automation equipment, to a broad range of customers, industries and geographic
locations.

Through Prism, we are developing an array of services that will include:

. High-speed data connectivity,

. Local and long distance voice,

. Video conferencing,

. Virtual private networks,

. Business continuity, and

. Teleworking solutions.

Prism will provide these services over a facilities-based network
consisting of splitterless, integrated data and voice line card technology from
Nortel Networks(TM) and an optical backbone that will enable us to transport
voice and data traffic from network edge to the Internet, a LAN/WAN or other
destinations.

Ventures is a leading provider of financing to venture capital-backed
companies. Ventures offers companies a broad range of innovative equity-linked
financing products, primarily venture debt and venture leases, which are loans
or leases combined with warrants or equity conversion options. Ventures may
also purchase direct equity stakes in companies. Our financing products
complement equity from venture capital firms and debt from commercial banks and
asset-based lenders.

Our businesses are diversified by customer, customer type, equipment
and/or industry segments and geographic locations. Our customers include
"Fortune 1000" corporations as well as smaller

3
<PAGE>

organizations and start-up companies. We do not depend on any single customer
or on any single source for the purchasing, selling or leasing of equipment, in
connection with our technology services or in our financing to venture capital-
backed companies. Prism has entered into an agreement with Nortel to purchase
up to $460 million of switches, integrated line cards, customer premise
equipment and ancillary technology to establish our network. We believe Prism
will deploy the largest amount of Nortel's digital modem technology in the
United States.

Our executive offices are located in the Chicago area, at 6111 North
River Road, Rosemont, Illinois 60018, telephone number (847) 698-3000. Our
website is located at http://www.comdisco.com. The information contained on our
website is not a part of this prospectus. At September 30, 1999 we had
approximately 3,600 full-time employees.

RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
Fiscal year ended September 30,
Three Months Ended ---------------------------------------------------------------------
December 31, 1999 1999 1998 1997 1996 1995
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.76 1.22 1.71 1.67 1.64 1.55
</TABLE>

These computations include us and our subsidiaries, and companies in
which we own 50% or less equity. For these ratios, "earnings" is determined by
adding "total fixed charges" (excluding interest capitalized), income taxes,
minority common stockholders equity in net income and amortization of interest
capitalized to income from continuing operations after eliminating equity in
undistributed earnings and adding back losses of companies in which we own at
least 20% but less than 50% equity. For this purpose, "total fixed charges"
consists of (1) interest on all indebtedness and amortization of debt discount
and expense, and (2) an interest factor attributable to rentals.

USE OF PROCEEDS

Unless we tell you otherwise in a prospectus supplement, we, or our
affiliates, will use the net proceeds from the sale of the debt securities for
general corporate purposes. General corporate purposes may include repayment of
debt, equipment acquisitions, additions to working capital and capital
expenditures. If we do not use the net proceeds immediately, we will
temporarily invest them in short-term interest-bearing obligations. For current
information on our commercial paper balances and average interest rates, see
our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q or
the prospectus supplement. See WHERE YOU CAN FIND MORE INFORMATION in this
prospectus.

FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus, any prospectus
supplements and any pricing supplements, including information incorporated by
reference, discuss future expectations, contain projections of results of
operations or financial condition or state other forward-looking information.

These statements are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and we intend that these forward-
looking statements have the benefits of the safe harbors created by those Acts.
The words and phrases "looking ahead," "we are confident," "should be," "will
be," "predicted," "believe," "expect," "anticipate" and similar expressions
identify forward-looking statements.

These forward-looking statements reflect our current views with respect
to future events and financial performance, but are subject to many
uncertainties and assumptions relating to our operations

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<PAGE>

and business environment which may cause our actual results to be materially
different from any future results expressed or implied by those forward-looking
statements. Some of these uncertainties and assumptions are discussed in our
most recent Annual Report on Form 10-K.

DESCRIPTION OF OUR DEBT SECURITIES

The Securities We May Offer

We may offer unsecured senior or subordinated debt securities in an
aggregate principal amount of up to $1,500,000,000. A prospectus supplement
will describe the specific amounts, prices and terms of any securities we
offer.

We also may issue convertible subordinated debt securities that pay no
interest or below-market interest at a substantial discount from their stated
principal amount. We will refer to these securities as zero-coupon convertibles
here and in any prospectus supplement or pricing supplement.

Issuance of Debt Securities under the Indentures

We will issue debt securities in one or more series under one or more
separate indentures between us and a U.S. banking institution, as trustee. We
will issue senior debt securities, subordinated debt securities and zero-coupon
convertibles under separate indentures, which we will refer to as senior
indentures, subordinated indentures, and zero-coupon indentures.

We have summarized selected provisions of the Indentures below. You
should read the indentures for the full texts of provisions that may be
important to you.

We will initially issue senior debt securities under a senior indenture
dated as of September 15, 1999, between us and SunTrust Bank, as senior trustee
(the "SunTrust Senior Indenture"). The SunTrust Senior Indenture is included as
an exhibit to the registration statement that we filed with the SEC. We will
file the forms of any other indentures with the SEC at the time we use them.
Capitalized terms used in the summary have the meanings specified in the
indentures.

Terms

We will describe specific terms relating to any new series of debt
securities in a prospectus supplement or pricing supplement. These terms will
include the following:

. title of the series and whether they are senior debt securities,
subordinated debt securities or zero-coupon convertibles;

. any limit on the total principal amount of the series;

. the price or prices at which we will sell the debt securities;

. maturity date or dates;

. the per annum interest rate or rates, if any, on the series and the
date or dates from which any such interest will accrue;

. whether the amount of payments of principal of, and premium, if any
or interest on the debt securities may be determined with reference
to any index, formula or other method, including one or more
currencies, commodities, equity indices or other indices, and the
manner of determining the amount of these payments;

. the dates on which we will pay interest on the debt securities and
the regular record date for determining who is entitled to the
interest payable on any interest payment date;

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<PAGE>

. the place or places where the principal of, and premium, if any,
and interest on the debt securities will be payable;

. any redemption dates, prices, obligations and restrictions;

. any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem the series;

. the denominations in which the debt securities will be issued, if
other than $1,000 and integral multiples of $1,000;

. the currency, currencies or currency unit in which we will pay the
principal of, and premium, if any, or interest, if any, on the debt
securities, if not United States dollars;

. provisions, if any, granting special rights to holders of the debt
securities upon the occurrence of specified events;

. any deletions from, modifications of or additions to the events of
default or our covenants with respect to the applicable series of
debt securities, and whether or not those events of default or
covenants are consistent with those contained in the indenture;

. any trustees, authenticating or paying agents, transfer agents or
registrars or other agents with respect to the debt securities;

. any conversion or exchange features;

. any special tax implications of the series; and

. any other terms of the series.

None of the indentures will limit the amount of debt securities that we
may issue. We may issue debt securities under each indenture up to the
principal amount that we are authorized to issue by our Board of Directors from
time to time.

Senior debt securities will rank equally with all of our other senior and
unsubordinated debt. Subordinated debt securities will have a junior position
to all of our senior debt as described below under the heading "Subordination"
on page 9.

We may sell debt securities at a discount below their stated principal
amount, bearing no interest or interest at a rate which at the time of issuance
is below market rates. We may also sell debt securities that are convertible
into or exchangeable for our common stock. If we issue these kinds of debt
securities, we will provide you with additional information in a prospectus
supplement or pricing supplement.

When we refer here and in any prospectus supplement or pricing supplement
to the principal of and premium, if any, and interest, if any, on debt
securities, we also mean to include mention of the payment of additional
amounts, if any, which we are required to pay under the indenture or the debt
securities in respect of certain taxes, assessments or other governmental
charges imposed on the holders of those debt securities.

Form, Transfer and Exchange

We will normally denominate debt securities, and pay principal, interest
and any premium, in U.S. dollars. If we denominate debt securities, or pay the
principal of, premium or any interest on any series of debt securities, in
foreign currencies or foreign currency units, we will provide you with further
information about those debt securities in a prospectus supplement or pricing
supplement.

We will normally issue the debt securities in book-entry only form. This
means that one or more permanent global certificates registered in the name of
The Depository Trust Company ("DTC"), New York, New York, or its nominee, will
represent the debt securities.

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<PAGE>

Alternatively, we may issue the debt securities in (1) certificated form
registered in the name of the holder of the debt securities, or (2) in bearer
form, with or without coupons attached. If we issue debt securities in
registered or bearer form, holders will receive certificates representing the
debt securities. We will normally issue debt securities in registered form only
in increments of $1,000 and debt securities in bearer form only in increments
of $5,000. Debt securities in bearer form are subject to other limitations that
we will describe in any prospectus supplement.

You can transfer or exchange debt securities in registered form without
charge except for reimbursement of taxes, if any. If we issue a series of debt
securities in both bearer and registered form, you may exchange bearer form for
registered form in a similar manner. You can transfer or exchange debt
securities at the corporate trust office of the appropriate trustee or at any
other office or agency maintained by us for these purposes that we identify in
any prospectus supplement.

Payment

We will pay principal, interest and any premium on debt securities in
book-entry only form as provided under the heading "--Book-Entry Procedures" in
this prospectus.

We will pay principal, interest and any premium on debt securities issued
solely in registered form at the New York, New York corporate trust office of
the appropriate trustee, or at any other office or agency maintained by us for
these purposes that we identify in any prospectus supplement. We also may, at
our option, pay interest on debt securities issued in registered form (1) by
check mailed to the person in whose name the debt securities are registered on
days specified in the indentures or any prospectus supplement or (2) by wire
transfer to that person's U.S. account.

We will make payments on debt securities in other forms at a place
designated by us and specified in any prospectus supplement.

If we authorize any other person to make payments on debt securities for
us, we will identify them in a prospectus supplement.

Events of Default

Unless we tell you otherwise in a prospectus supplement, an event of
default under the indenture will occur if:

. we fail to pay the principal or any premium on any debt security
when due;

. we fail to deposit any sinking fund payment when due;

. we fail to pay interest or any additional amounts on any debt
security for 30 days;

. we fail to perform any other covenant in the indenture that
continues for 60 days after we have been given written notice of
that failure;

. any of our debt, other than any debt securities issued under the
indenture or non-recourse indebtedness, with a principal amount of
more than 5% of our consolidated worth that is accelerated and this
event is not rescinded before a judgment is obtained; or

. certain events in bankruptcy, insolvency or reorganization occur.

An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The trustee may withhold notice to the
holders of debt securities of any default, except in the payment of principal
or interest, if it considers that action to be in the best interests of the
holders.

7
<PAGE>

If an event of default for any series of debt securities occurs and
continues, the trustee, or the holders of at least 25% in aggregate principal
amount of the debt securities of the series, may declare the entire principal
of all the debt securities of that series to be due and payable immediately.
If this happens, subject to certain conditions, the holders of a majority of
the aggregate principal amount of the debt securities of that series can void
the declaration of acceleration.

Other than its duties in case of a default, a trustee has no obligation
to exercise any of its rights or powers under an indenture at the request,
order or direction of any holders, unless the holders offer the trustee
reasonable indemnity. If they provide this reasonable indemnification, the
holders of a majority in principal amount of any series of debt securities may
direct the time, method and place of conducting any proceeding or any remedy
available to the trustee, or exercising any power conferred upon the trustee,
for any series of debt securities.

Covenants

Under each indenture, we will:

. pay the principal, interest and any premium on the debt securities
when due;

. maintain a place of payment;

. pay the additional amounts in the debt securities when specified;

. deliver a report to the trustee 120 days after the end of each
fiscal year reviewing our obligations under the indenture; and

. deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.

No indenture will limit our ability to incur additional debt, unless we
describe this limitation to you in a prospectus supplement.

Book-Entry Procedures

The following discussion pertains to debt securities that we issue in
book-entry only form.

We will issue one or more global securities, currently limited to
individual amounts of $400 million, representing the debt securities issued to
DTC or its nominee, Cede & Co. DTC will keep a computerized record of its
participants, for example, your broker, whose clients have purchased the debt
securities. The participant, in turn, keeps a record of its clients who
purchased the debt securities. A global security may not be transferred,
except that DTC, its nominees and their successors may transfer an entire
global security to one another.

If we use book-entry procedures, we will not deliver securities in
certificated form to individual purchasers of the debt securities, and no
person holding a beneficial interest in a global security will be treated as a
holder for any purpose under the indenture. Accordingly, holders of beneficial
interests must rely on the procedures of DTC and the participant through which
that person owns its interest in order to exercise any rights of a holder
under that global security or the indenture. Beneficial interests in global
securities will be shown on, and transfers of global securities will be made
only through, records maintained by DTC and its participants. In some cases,
the laws of some jurisdictions require that purchasers of securities take
physical delivery of those securities in certificated form. These limits and
laws may impair the ability to transfer beneficial interests in a global
security.

DTC has provided us with the following information: DTC is a limited-
purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New

8
<PAGE>

York Banking Law, a member of the United States Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants deposit with
DTC. DTC also facilitates the settlement among its participants of securities
transactions, including transfers and pledges, in deposited securities through
computerized records for its participants' accounts. This eliminates the need
to exchange certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.

Other organizations, including securities brokers and dealers, banks and
trust companies that work through DTC's participants, also use DTC's book-entry
system. The rules that apply to DTC and its participants are on file with the
SEC.

A number of DTC's participants, together with the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc., own DTC.

We will wire principal and interest payments to DTC's nominee. We and the
trustee will treat DTC's nominee as the owner of the global securities for all
purposes. Accordingly, we and the trustee will have no direct responsibility or
liability to pay amounts due on the securities to owners of beneficial
interests in the global securities.

It is DTC's current practice, when it receives any payment of principal
or interest, to credit its participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global securities
as shown on DTC's records. In addition, it is DTC's current practice to use an
omnibus proxy to assign any rights to consent or vote to the participant whose
account is credited with securities on a record date. Customary practices
between the participants and owners of beneficial interests, as is the case
with securities held for the account of customers registered in "street name,"
will govern payments by participants to owners of beneficial interests in the
global securities, and voting by participants. However, these payments will be
the responsibility of the participants and not of DTC, the trustee or us.

Debt securities represented by a global security will be exchangeable for
debt securities in registered form with the same terms in authorized
denominations only if:

. DTC notifies us that it is unwilling or unable to continue as
depository or if DTC ceases to be a clearing agency registered
under applicable law and we do not appoint a successor depository
within 90 days;

. DTC ceases to be a clearing agency registered under the Securities
Exchange Act of 1934;

. We, at our option, elect to issue notes in definitive form;

. There is, or continues to be, an event of default with respect to
the notes.

If applicable, redemption notices shall be sent to Cede & Co. If less
than all of the book-entry securities of like tenor and terms are being
redeemed, DTC's practice is to determine by lot the amount of the interest of
each of its participants in that issue to be redeemed.

In order to elect to have us repay book-entry securities, a beneficial
owner must notify the trustee, through its participant, and cause the
participant to transfer the participant's interest in the global security or
securities representing those book-entry securities, on DTC's records, to the
trustee. The requirement for physical delivery of book-entry securities in
connection with a demand for repayment will be deemed satisfied when the
ownership rights in the global security or securities representing those book-
entry securities transferred by Direct Participants on the DTC's records.

DTC may discontinue providing its services as securities depository with
respect to book-entry securities at any time by giving reasonable notice to us
or the trustee. Under these circumstances, in the event that a successor
securities depository is not obtained, securities in certificated form are
required to be printed and delivered.

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<PAGE>

We may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, securities
in certificated form will be printed and delivered.

The information in this section concerning DTC has been obtained from
sources that we believe to be reliable, but we take no responsibility for the
accuracy thereof.

Subordination

Payment of the principal, interest and any premium on subordinated debt
securities will, when stated in a subordinated indenture and applicable
prospectus supplement, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness. Under the indenture, "Senior
Indebtedness" means all notes or other unsecured evidences of our indebtedness,
whether outstanding on the date of the indenture or created, assumed or
incurred at a later date, for money we borrow, including all indebtedness of
any other person for money borrowed which we guarantee, not expressed to be
subordinate or junior in right of payment to any other of our indebtedness.

Each subordinated indenture will provide that we may not pay principal,
interest and any premium on the subordinated debt securities in the event:

. of any insolvency, bankruptcy or similar proceeding involving us or
our property; or

. we fail to pay the principal, interest, any premium or any other
amounts on any Senior Indebtedness when due.

Under these circumstances, any payment or distribution under the
subordinated debt securities, whether in cash, securities or other property,
which would otherwise, with the exception of the subordination provisions, be
payable or deliverable in respect of the subordinated debt securities, will be
paid or delivered directly to the holders of Senior Indebtedness in accordance
with the priorities then existing among those holders until all Senior
Indebtedness has been paid in full. If any payment or distribution under the
subordinated debt securities is received by any holder of any subordinated debt
securities in contravention of any of the terms of the indenture and before all
the Senior Indebtedness has been paid in full, that payment or distribution or
security will be received in trust for the benefit of, and paid over or
delivered and transferred to, the holders of the Senior Indebtedness at the
time outstanding in accordance with the priorities then existing among those
holders for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all that Senior Indebtedness in full.

As of September 30, 1999, we had approximately $3.7 billion of Senior
Indebtedness outstanding. Subordinated indentures will not limit the amount of
Senior Indebtedness that we may incur.

Redemption Provisions, Sinking Fund and Defeasance

We may redeem some or all of the debt securities at our option subject to
the conditions stated in the prospectus supplement relating to that series of
debt securities. If a series of debt securities is subject to a sinking fund,
the prospectus supplement will describe those terms.

Consolidation, Merger or Sale

We may not merge with another company or sell or transfer all or
substantially all of our property to another company unless:

. we are the continuing corporation; or

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<PAGE>

. the successor corporation or purchaser is a corporation organized
under the laws of the United States, any state within the United
States, or the District of Columbia which expressly assumes:

--payment of principal, interest and any premium on the debt
securities; and

--performance and observance of all covenants and conditions in the
indenture;

and in either case, immediately after the transaction, no event of
default and no event which, if notice was given and/or a certain period of
time passed, would become an event of default, shall exist.

If we are not the continuing corporation, we will have no further
liabilities or obligations under any indenture or the debt securities.

Changes to the Indenture

Holders who own more than 50% in principal amount of the outstanding
debt securities of each series affected can agree to change the indenture.
However, no change can affect your principal or interest payment terms, or the
percentage required to change other terms of the indenture, without your
consent, as well as the consent of others similarly affected. In addition, no
supplemental indenture may directly or indirectly modify the indenture in any
manner which might alter the subordination of the outstanding debt securities.

We may enter into supplemental indentures for other specified purposes
which would not materially adversely affect your interests, including the
creation of any new series of debt securities, without the consent of any
holder of debt securities.

Concerning the Initial Senior Trustee

SunTrust Bank serves as trustee under the SunTrust Senior Indenture. Its
principal office is located at 25 Park Place, Atlanta, Georgia. We lease
equipment to SunTrust Bank and provide it with business continuity services.
We also have commercial banking relationships with SunTrust Bank and certain
of its affiliates.

DESCRIPTION OF OUR COMMON STOCK

The following is a summary description of our common stock and related
preferred stock purchase rights. You should read our restated certificate of
incorporation, bylaws and rights agreement which created the preferred stock
purchase rights for the full text of provisions which may be important to you.
Each of these documents is included as an exhibit to the registration
statement.

General

On September 30, 1999, we had 850,000,000 shares of authorized capital
stock, consisting of:

. 100,000,000 shares of preferred stock, none of which were outstanding;
and

. 750,000,000 shares of common stock, $0.10 par value, 152,792,250 of
which were issued and outstanding.

Listing

We list our common stock on The New York Stock Exchange and the Chicago
Stock Exchange under the symbol "CDO". We will also list any additional common
stock we issue on these exchanges.

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Dividends

Common stockholders may receive dividends when declared by our board of
directors. We may pay dividends in cash, stock or other forms.

Fully Paid

All outstanding shares of common stock are fully paid and non-assessable.
Any additional common stock we issue will also be fully paid and non-
assessable.

Voting Rights

Each share of common stock has one vote in the election of directors and
other matters. Common stockholders have no preemptive or cumulative voting
rights.

Other Rights

We will notify common stockholders of any stockholders' meetings
according to applicable law. If we liquidate, dissolve or wind-up our business,
either voluntarily or not, common stockholders will share equally in the assets
remaining after we pay our creditors and preferred stockholders, if any.

Transfer Agents and Registrars

We, along with ChaseMellon Stockholder Services, are transfer agent and
registrar for the common stock. You may contact us at the address listed on
page 2. ChaseMellon Stockholder Services is located in Ridgefield, New Jersey.

Preferred Stock Purchase Rights

On November 4, 1997, our board of directors declared a dividend of one
preferred stock purchase right for each outstanding share of our common stock
payable to holders of record as of the close of business on November 17, 1997.
Shares of common stock issued after November 17, 1997 and before the
distribution date defined below have, or will have, a right attached. A rights
agreement dated as of November 4, 1997 with ChaseMellon Stockholder Services,
as rights agent, contains the terms and conditions of the rights. We filed a
copy of the rights agreement with the SEC. We have listed the rights on the New
York Stock Exchange.

A "distribution date" will occur upon the earliest of:

. 10 days after a public announcement that a person or group has
become an acquiring person; or

. 10 business days (or a later date if determined by our board of
directors) after the date a person or group makes a tender or
exchange offer that, if completed, would result in that person or
group being the beneficial owner of 15% or more of our outstanding
common stock; or

. 10 business days after our board of directors declares a person to
be an adverse person.

An "acquiring person" generally is a person or group which beneficially
owns 15% or more of our outstanding common stock. An acquiring person does not
include any person or group that beneficially owned 20% or more of our
outstanding common stock on November 17, 1997, until that holder acquires
beneficial ownership of 30% or more of the outstanding common stock. An
"adverse person" is a person or group (1) which beneficially owns 10% or more
of our outstanding common stock and (2) which the Board of Directors has
determined has interests adverse to ours based on requirements set out in the
Rights Agreement.

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Before the distribution date:

. common stock certificates will evidence the rights;

. rights will transfer with the common stock;

. registered holders of the common stock will be deemed to hold the
associated rights; and

. rights are not exercisable.

After the distribution date:

. the rights agent will mail separate certificates evidencing the
rights to each record holder of our common stock as of the close of
business on the distribution date;

. each right will be exercisable to purchase one one-thousandth of a
share of Series C Junior Participating Preferred Stock for the
stated purchase price of $75;

. rights will be transferable separately from the common stock; and

. unless directed by our Board of Directors, we will only issue
rights with shares of common stock issued:

--on exercise of stock options or as awards under employee benefit
plans granted as of the distribution date; or

--on conversion of securities issued after November 17, 1997.

If any person becomes an acquiring person or an adverse person, each
right, other than rights beneficially owned by the acquiring person or adverse
person and certain affiliated persons, will entitle the holder to purchase, for
the stated purchase price, a number of shares of common stock having a market
value of twice the stated purchase price.

If, after any person has become an acquiring person or an adverse person,
(1) we enter into a merger or other business combination in which we are not
the surviving company or our common stock is exchanged for other securities or
assets, or (2) we sell or otherwise transfers assets or earning power
aggregating more than 50% of our consolidated assets or earning power, then
each right, other than rights beneficially owned by the acquiring person or
adverse person and certain affiliated persons, will entitle the holder to
purchase, for the stated purchase price, a number of shares of common stock of
the other party to such business combination or sale, or in certain
circumstances, an affiliate, having a market value of twice the stated purchase
price.

At any time after any person has become an acquiring person or an adverse
person, our Board of Directors may exchange all or part of the rights, other
than rights beneficially owned by an acquiring person or adverse person and
certain affiliated persons, for shares of common stock at an exchange ratio of
one share of common stock per right.

Our board of directors may redeem all of the rights at a price of $.005
per right at any time prior to the close of business on the 15th day after the
public announcement of the existence of an acquiring person.

The rights have certain antitakeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire us without
conditioning the offer on a substantial number of rights being acquired.
Accordingly, the existence of the rights may deter certain acquirors from
making takeover proposals or tender offers. However, the rights are not
intended to prevent a takeover. Rather, they are designed to enhance the
ability of our Board of Directors to negotiate with an acquiror on behalf of
all stockholders. In addition, the rights should not interfere with a proxy
contest.

The rights will expire on November 17, 2007, unless earlier exchanged or
redeemed.

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DELAWARE GENERAL CORPORATION LAW AND OUR
RESTATED CERTIFICATE OF INCORPORATION AND BYLAWS

General

We are a Delaware corporation subject to the Delaware General Corporation
Law. Provisions of Delaware law, in addition to provisions of our restated
certificate of incorporation and bylaws, address corporate governance issues,
including the rights of our stockholders. Some of these provisions could hinder
management changes while others could have an anti-takeover effect.

We have summarized the key provisions below. You should read the full
text of the provisions of our restated certificate of incorporation and bylaws
and Delaware law which may be important to you.

Business Combinations

Delaware law and our restated certificate of incorporation generally
require that at least 50% of our outstanding common stock vote to approve any
merger, share exchange or sale of substantially all of our assets.

Under Delaware law, we generally may not engage in a business combination
with any stockholder that beneficially owns, together with affiliates and
associates, 15% or more of our outstanding common stock (for these purposes an
"interested stockholder") for three years after the interested stockholder
becomes an interested stockholder. This prohibition does not apply if :

. our board of directors approves the business combination or the
transaction that results in the stockholder becoming an interested
stockholder before the stockholder becomes an interested
stockholder;

. the interested stockholder owns at least 85% of our voting stock,
other than common stock held by our employee directors or employee
stock plans, upon completion of the transaction by which the
stockholder becomes an interested stockholder; or

. our board of directors and 66 2/3% of our outstanding common stock
not owned by the interested stockholder vote to approve the
business combination.

Our restated certificate of incorporation requires that at least 66 2/3%
of our outstanding common stock not owned by a "substantial stockholder" vote
to approve certain business combinations and certain other transactions with a
substantial stockholder unless certain minimum price and procedural
requirements are met. A substantial stockholder is defined as any person or
entity that acquires at least 10% of our outstanding common stock, excluding
any member of the Board of Directors as of September 30, 1985, or any of our
employee benefit plans. This super-majority approval is not required if:

. the business combination is solely between us and another
corporation in which we own 50% or more stock and a substantial
stockholder owns none, or

. all following conditions are satisfied:

(1)holders of common stock receive consideration with a cash or fair market
value not less than the higher of

--the highest per share price paid by that substantial stockholder in
acquiring any common stock, or

--the highest per share market price of our common stock during the
three-month period before the date of the proxy statement described
in clause (3) below or, if none, the six-month period before the
business combination is consummated;

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(2)after becoming a substantial stockholder and before the business
combination is consummated

--this substantial stockholder has not acquired any newly issued
shares of capital stock from us except proportionately as a
stockholder or upon compliance with our certificate of
incorporation; and

--this substantial stockholder has not received the benefit (except
proportionately as a stockholder) of any loans or other financial
assistance provided by us, or made any major change in our equity
capital structure; and

(3)if that proposal otherwise requires stockholder approval, a proxy
statement meeting the requirements of the Exchange Act shall be mailed to
our stockholders for the purpose of soliciting stockholder approval of such
business combination.

Board Of Directors

Members of our Board of Directors serve staggered three year terms. This
means we elect only one-third of our directors in each year.

Stockholder Proposals And Director Nominations

Our stockholders can submit stockholder proposals and nominate candidates
for the board of directors if the stockholders follow advance notice procedures
described in our bylaws.

To nominate directors, stockholders must submit a written notice to our
corporate secretary not less than 120 days nor more than 150 days before the
first anniversary of the date of the mailing of the proxy statement for our
last annual meeting. The notice must include the name and address of the
stockholder and of the nominee, a description of any arrangements between the
stockholder and the nominee, information about the nominee required by the SEC,
the written consent of the nominee to serve as a director and other
information.

Stockholders must submit proposals to our corporate secretary not less
than 120 days and more than 150 days before the first anniversary of the date
of the mailing of the proxy statement for our last annual meeting. The notice
must include:

. a description of the proposal;

. the reasons for presenting the proposal at the annual meeting;

. the text of any resolutions to be presented;

. the stockholder's name and address and number of shares held; and

. any material interest of the stockholder in the proposal.

We may reject director nominations and stockholder proposals that are
late or do not include all required information. This could prevent
stockholders from bringing certain matters before an annual or special meeting,
including making nominations for directors.

Meetings of Stockholders

Our restated certificate of incorporation and bylaws do not permit our
stockholders to call a special meeting, regardless of the percentage of voting
stock they hold. This provision could have the effect of delaying until the
next annual stockholders' meeting stockholder actions that holders of a
majority of our common stock favor.

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Indemnification of Directors

We indemnify our officers and directors to the fullest extent permitted
under Delaware law against all liabilities incurred in connection with their
service to us.

Limitation of Liability of Directors

Our restated certificate of incorporation provides that our directors
will not be personally liable for monetary damages to us for breaches of their
fiduciary duty as directors, unless they:

. violated their duty of loyalty to us or our stockholders;

. acted in bad faith;

. knowingly or intentionally violated the law;

. authorized illegal dividends or redemptions; or

. derived an improper personal benefit from their action as
directors.

This provision applies only to claims against directors arising out of
their role as directors and not in any other capacity, including any capacity
as an officer or employee. Directors remain liable for violations of the
federal securities laws and we retain the right to pursue legal remedies other
than monetary damages, including an injunction or rescission for breach of the
director's duty of care.

PLAN OF DISTRIBUTION

We may sell any series of debt securities:

. through underwriters or dealers;

. through agents; or

. directly to one or more purchasers.

The prospectus supplement will include:

. the initial public offering price;

. the names of any underwriters, dealers or agents;

. the purchase price of the debt securities;

. our proceeds from the sale of the debt securities;

. any underwriting discounts or agency fees and other underwriters'
or agents' compensation; and

. any discounts or concessions allowed or reallowed or paid to
dealers.

If we use underwriters in the sale, they will buy the debt securities for
their own account. The underwriters may then resell the debt securities in one
or more transactions at a fixed public offering price or at varying prices
determined at the time of sale.

The obligations of the underwriters to purchase the debt securities will
be subject to certain conditions. The underwriters will be obligated to
purchase all the debt securities offered if they purchase any debt securities.
Any initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.

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If we use agents in the sale, they will use their reasonable best
efforts to solicit purchases for the period of their appointment.

If we sell directly to you no underwriters or agents would be involved.

Underwriters, dealers and agents that participate in the distribution of
the debt securities may be underwriters as defined in the Securities Act. Any
discounts or commissions that we pay them and any profit they receive when
they resell the debt securities may be treated as underwriting discounts and
commissions under the Securities Act. We may enter into agreements with
underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act, or to contribute
with respect to payments that they may be required to make, and to reimburse
those persons for expenses.

To facilitate a debt securities offering, any underwriter may engage in
over-allotment, stabilizing transactions, short covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.

. Over-allotment involves sales in excess of the offering size, which
creates a short position.

. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum.

. Short covering transactions involve purchases of the securities in
the open market after the distribution is completed to cover short
positions.

. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the
dealer are purchased in a covering transaction to cover short
positions.

Those activities may cause the price of the securities to be higher than
it would otherwise be. If commenced, the underwriters may discontinue those
activities at any time.

We are not making an offer of debt securities in any state that does not
permit this kind of offer.

Underwriters, dealers and agents may be our customers or may engage in
transactions with us or perform services for us in the ordinary course of
business.

LEGAL OPINIONS

Jeremiah M. Fitzgerald, Esq., our Vice President and Chief Legal
Officer, or another of our lawyers, will issue an opinion about the legality
of the securities for us. Mr. Fitzgerald owns 71,292 shares of our common
stock and holds options granted under our stock option plans to purchase an
additional 164,415 shares of common stock. We expect Brown & Wood llp, New
York, New York to advise any underwriters, agents and dealers.

EXPERTS

KPMG LLP, independent certified public accountants, audited and reported
on our financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement. We have incorporated
these documents by reference in reliance upon the authority of KPMG LLP as
experts in accounting and auditing in giving the report.

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$500,000,000

Senior Medium-Term Notes, Series I
Due Nine Months to 15 Years
From Date of Issue

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PROSPECTUS SUPPLEMENT

---------------------------------

Merrill Lynch & Co.

Banc of America Securities LLC

Salomon Smith Barney

Warburg Dillon Read LLC

February 29, 2000

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