Rule 424(b)(3) and Rule 424(c)
File No. 33-45490
File No. 33-45490-01
PRICING SUPPLEMENT NO. 24D DATED May 12, 1994
(To Prospectus Dated August 12, 1992, as supplemented by the
Prospectus Supplement Dated August 19, 1992)
SOUTHWESTERN BELL CAPITAL CORPORATION
$50,000,000
Medium-Term Notes, Series D
Due From 9 months to 30 Years From Date of Issue
Type of Note: Floating Rate
Form of Note: Book-entry
Initial Interest Rate: 4.63%
Price to Public: See "Plan of Distribution", below
Original Issue Date: May 19, 1994
Maturity Date: May 19, 1997
Index Maturity: Three months
Interest Payment Dates: Quarterly on each August 19, November 19,
February 19 and May 19, commencing August 19,
1994, and on the Maturity Date. If any
Interest Payment Date would otherwise be a day
that is not a Business Day, such Interest
Payment Date shall be the next succeeding
Business Day. Interest payments will include
the amount of interest accrued from and
including the next preceding Interest Payment
Date in respect of which interest has been
paid (or from and including the Original Issue
Date) to but excluding the applicable Interest
Payment Date.
Interest Rate: The Interest Rate will be the Base Rate plus or
minus the Spread; provided, however, that the
Interest Rate in effect from the Original Issue
Date to the first Interest Reset Date will be the
Initial Interest Rate. Interest will be computed
on the basis of an actual day year of actual day
months.
Spread: Plus .30%
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Base Rate: Treasury Rate. The "Treasury Rate" for each
Interest Reset Date will be determined as the rate
for the auction held on the corresponding Interest
Determination Date of direct obligations of the
United States ("Treasury bills") having the Index
Maturity designated herein as published in
H.15(519) under the heading "U.S. Government
Securities Treasury bills--auction average
(investment)" or, if not so published by 9:00 a.m.,
New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the
auction average rate (expressed as a bond
equivalent, rounded to the nearest one-hundredth of
a percent, with five one-thousandths of a percent
rounded upwards, 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. In the event that the
results of the auction of Treasury bills having the
Index Maturity designated herein are not published
or reported as provided above by 3:00 p.m., New
York City time, on such Calculation Date or if no
such auction is held on such Interest Determination
Date, then the Treasury Rate for such Interest
Reset Date shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed
as a bond equivalent, rounded to the nearest
one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards, 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 corresponding Interest Determination Date,
of three leading primary United States government
securities dealers in The City of New York selected
by the Calculation Agent for the issue of Treasury
bills with a remaining maturity closest to the
Index Maturity designated herein; provided,
however, that if the dealers selected as aforesaid
by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate for
such Interest Reset Date will be the Treasury Rate
in effect immediately prior to the corresponding
Interest Determination Date.
Interest Reset Dates: Weekly, on the Tuesday of each week (except as
provided below under "Interest Determination
Date"), to but excluding the Maturity Date.
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Interest Determination
Date: The day of the week in which each Interest Reset
Date falls on which Treasury bills would normally
be auctioned. Treasury bills are normally sold
at auction on Monday of each week, unless that day
is a legal holiday, in which case the auction is
normally held on the following Tuesday, except
that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such
Friday will be the Interest Determination Date
pertaining to the Interest Reset Date occurring in
the next succeeding week. If, however, an auction
falls on any day which would normally be an
Interest Reset Date, then such Interest Reset Date
will instead be the first Business Day following
such auction.
Calculation Date: The earlier of (i) the tenth calendar day after
each Interest Determination Date, or, if such day
is not a Business Day, the next succeeding
Business Day or (ii) the Business Day preceding
the applicable Interest Payment Date or Maturity
Date, as the case may be.
Redemption: The Notes are not redeemable prior to maturity.
Selling Agent: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Selling Agent's Capacity: Principal
Selling Agent's Discount: .350%
Calculation Agent: Merrill Lynch, Pierce, Fenner & Smith Incorporated
United States Taxation
The following discussion of the United States federal income tax
consequences of the ownership of the Notes supplements, and to the
extent inconsistent with, replaces the discussion under the caption
"United States Taxation" in the Prospectus Supplement dated August 19,
1992. Terms used and not defined herein have the same meanings as in
the Prospectus Supplement.
This discussion is based on regulations (the "Regulations") under
the original issue discount and related provisions of the Internal
Revenue Code of 1986, as amended.
Under the Regulations the Notes will be treated as variable rate
debt instruments. Interest on a Note will be taxable to a beneficial
owner who or that is a United States Holder as ordinary income at the
time it is received or accrued, depending on the holder's method of
accounting for tax purposes.
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The current "backup withholding" rate, if applicable, is 31%.
Original Issue Discount
General. A Note will be treated as issued at an original issue
discount (a "Discount Note") if the excess of the Note's "stated
redemption price at maturity" over its issue price is more than a
"de minimis amount" (as defined below). Generally, the issue price of
a Note will be the first price at which a substantial amount of Notes
included in the issue of which the Note is a part is sold to investors
other than 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
total of all payments provided by the Note that are not payments of
"qualified stated interest". All interest payments will be treated as
"qualified stated interest".
In general, if the excess of a Note's stated redemption price at
maturity over its issue price is less than 1/4 of 1 percent of the
Note's stated redemption price at maturity multiplied by the number of
complete years to its maturity (the "de minimis amount"), then such
excess, if any, constitutes "de minimis original issue discount" and
the Note is not a Discount Note. Unless the election described below
under "Election to Treat All Interest as Original Issue Discount" is
made, a United States Holder of a Note with de minimis original issue
discount must include such de minimis original issue discount in income
as stated principal payments on the Note are made. The includible
amount with respect to each such payment will equal the product of the
total amount of the Note's de minimis original issue discount and a
fraction, the numerator of which is the amount of the principal payment
made and the denominator of which is the stated principal amount of the
Note.
United States Holders of Discount Notes having a maturity of more
than one year from their date of issue must include original issue
discount ("OID") in income calculated on a constant-yield method before
the receipt of cash attributable to such income, and generally will
have to include in income increasingly greater amounts of OID over the
life of the Note. The amount of OID includible in income by the United
States Holder of a Discount Note is the sum of the daily portions of
OID with respect to the Discount Note for each day during the taxable
year or portion of the taxable year on which the United States Holder
holds such Discount Note ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata
portion of the OID allocable to that accrual period. Accrual periods
with respect to a Note will be the quarter ending on each payment date.
The amount of OID allocable to an accrual period equals the excess of
(a) the product of the Discount Note's adjusted issue price at the
beginning of the accrual period and such Note's yield to maturity
(determined on the basis of compounding at the close of each accrual
period and properly adjusted for the length of the accrual period) over
(b) the sum of the payments of qualified stated interest on the Note
allocable to the accrual period. The "adjusted issue price" of a
Discount Note at the beginning of any accrual period is the issue price
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of the Note increased by (x) the amount of accrued OID for each prior
accrual period and decreased by (y) the amount of any payments
previously made on the Note that were not qualified stated interest
payments. The amount of OID allocable to the final accrual period is
the difference between (x) the amount payable at the maturity of the
Note (other than any payment of qualified stated interest) and (y) the
Note's adjusted issue price as of the beginning of the final accrual
period.
Acquisition Premium. A United States Holder that purchases a Note
for an amount less than or equal to the sum of all amounts payable on
the Note after the purchase date other than payments of qualified
stated interest but in excess of its adjusted issue price (any such
excess being "acquisition premium") and that does not make the election
described below under "Election to Treat All Interest as Original Issue
Discount" is permitted to reduce the daily portions of OID by a
fraction, the numerator of which is the excess of the United States
Holder's adjusted basis in the Note immediately after its purchase over
the adjusted issue price of the Note, and the denominator of which is
the excess of the sum of all amounts payable on the Note after the
purchase date, other than payments of qualified stated interest, over
the Note's adjusted issue price.
Election to Treat All Interest as Original Issue Discount. A
United States Holder may elect to include in gross income all interest
that accrues on a Note using the constant-yield method described above
under the heading "Original Issue Discount -- General", with the
modifications described below. For purposes of this election, interest
includes stated interest, OID, de minimis original issue discount,
market discount, de minimis market discount and unstated interest, as
adjusted by any amortizable bond premium or acquisition premium.
In applying the constant-yield method to a Note with respect to
which this election has been made, the issue price of the Note will
equal the electing United States Holder's adjusted basis in the Note
immediately after its acquisition, the issue date of the Note will be
the date of its acquisition by the electing United States Holder, and
no payments on the Note will be treated as payments of qualified stated
interest. This election will generally apply only to the Note with
respect to which it is made and may not be revoked without the consent
of the Internal Revenue Service ("Service"). If this election is made
with respect to a Note with amortizable bond premium, then the electing
United States Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt
instruments with amortizable bond premium (other than debt instruments
the interest on which is excludible from gross income) held by the
electing United States Holder as of the beginning of the taxable year
in which the Note with respect to which the election is made is
acquired or thereafter acquired. The deemed election with respect to
amortizable bond premium may not be revoked without the consent of the
Service.
Plan of Distribution
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The Selling Agent has purchased the Notes as principal in this
transaction for resale to one or more investors at varying prices
related to prevailing market conditions at the time or times of resale
as determined by the Selling Agent.
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