<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-10159
PROSPECTUS SUPPLEMENT
(To Prospectus dated August 19, 1996)
$250,000,000
SUNTRUST BANKS, INC.
6% SENIOR DEBENTURES DUE JANUARY 15, 2028
---------------------------
INTEREST PAYABLE JANUARY 15 AND JULY 15
---------------------------
Interest on the 6% Senior Debentures Due January 15, 2028 (the "Senior
Debentures") will be payable semiannually on January 15 and July 15 of each
year, commencing July 15, 1998. The Senior Debentures are not redeemable prior
to maturity by SunTrust Banks, Inc. ("SunTrust" or the "Corporation") and will
not be entitled to any sinking fund, but the registered holder of each Senior
Debenture may elect to have such Senior Debenture, or any portion of the
principal amount thereof that is an integral multiple of $1,000, redeemed on
January 15, 2008 (or, if January 15, 2008 is not a Business Day, the next
succeeding Business Day), at 100% of the principal amount thereof, together with
any accrued and unpaid interest thereon to January 15, 2008. Such election,
which is irrevocable when made, must be made within the period commencing on
November 15, 2007 and ending at 5:00 p.m., New York City time, on December 15,
2007 (or, if December 15, 2007 is not a Business Day, the next succeeding
Business Day). See "Description of Senior Debentures -- Redemption at Option of
Holder." The Senior Debentures will be issued only in registered form in
denominations of $1,000 and integral multiples thereof.
The Senior Debentures will be represented by one or more Book-Entry
Securities registered in the name of the nominee of The Depository Trust
Company, which will act as the Depositary (the "Depositary"). Beneficial
interests in the Senior Debentures represented by Book-Entry Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its direct and indirect participants. Except as
described herein, Senior Debentures in definitive form will not be issued. See
"Description of Senior Debentures -- Book-Entry System." Settlement for the
Senior Debentures will be made in immediately available funds. The Senior
Debentures will trade in the Depositary's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Senior Debentures will
settle in immediately available funds. All payments of principal and interest
will be made by the Corporation in immediately available funds. See "Description
of Senior Debentures -- Same-Day Settlement and Payment."
---------------------------
THE SENIOR DEBENTURES ARE UNSECURED OBLIGATIONS OF THE CORPORATION, ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK
SUBSIDIARY OF THE CORPORATION, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
==================================================================================================================
Price to Underwriting Proceeds to
Public(1) Discount(2) Company(1)(3)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Senior Debenture................... 99.277% 0.331% 98.946%
- ------------------------------------------------------------------------------------------------------------------
Total.................................. $248,192,500 $827,500 $247,365,000
==================================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from January 21, 1998, to the date of
delivery.
(2) The Corporation has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting".
(3) Before deducting expenses payable by SunTrust estimated to be $150,000.
---------------------------
The Senior Debentures offered by this Prospectus Supplement are offered by
the Underwriters subject to prior sale, withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that delivery of the Senior
Debentures will be made in book-entry form through the facilities of the
Depositary, against payment therefor in immediately available funds, on or about
January 21, 1998.
---------------------------
LEHMAN BROTHERS
CHASE SECURITIES INC.
SUNTRUST EQUITABLE SECURITIES CORPORATION
January 15, 1998
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SENIOR DEBENTURES. SUCH
TRANSACTIONS MAY INCLUDE THE PURCHASE OF THE SENIOR DEBENTURES FOLLOWING THE
PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT POSITION IN THE SENIOR
DEBENTURES OR FOR THE PURPOSE OF MAINTAINING THE PRICE OF THE SENIOR DEBENTURES.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
THE CORPORATION
SunTrust Banks, Inc. ("SunTrust" or the "Corporation") is a regional bank
holding company headquartered in Atlanta, Georgia. The three principal
subsidiaries of the Corporation are SunTrust Banks of Florida, Inc.,
headquartered in Orlando, Florida ("STB of Florida"), SunTrust Banks of Georgia,
Inc., headquartered in Atlanta, Georgia ("STB of Georgia"), and SunTrust Banks
of Tennessee, Inc., headquartered in Nashville, Tennessee ("STB of Tennessee").
Unless the context indicates otherwise, references herein to the "Corporation"
or "SunTrust" are to SunTrust Banks, Inc. and its subsidiaries, including its
subsidiary banks.
The Corporation, through its subsidiary banks, conducts a broad range of
commercial banking activities, including accepting demand, time and savings
deposits, making both secured and unsecured business and consumer loans and
leases, extending commercial lines of credit, issuing and servicing credit cards
and certain other types of revolving credit accounts, providing commercial
factoring services, cash management services, investment counseling, safe
deposit services, personal and corporate trust and other fiduciary services and
engaging in leasing, mortgage banking, correspondent banking, international
banking, investment banking, trading in U.S. government securities and municipal
bonds and underwriting certain types of general obligation municipal bonds.
RECENT DEVELOPMENTS
On January 8, 1998, the Corporation reported its results for the fiscal
year ended December 31, 1997. Net income for 1997 was $667.3 million compared
with $616.6 million in 1996. Diluted earnings per share for 1997 were $3.13, an
increase of 13.4% from $2.76 in 1996. Basic earnings per share in 1997 were
$3.17 compared with $2.80 for 1996. The annual return on average assets ("ROA")
and return on average realized common equity ("ROE") were 1.30% and 21.13%,
respectively, compared with 1.35% and 18.89% in 1996.
Credit quality continued to strengthen as evidenced by a 41% decline in
nonperforming assets and improvement in associated credit ratios. Nonperforming
assets totaled $150.6 million at December 31, 1997 compared with $255.8 million
at December 31, 1996. The ratio of nonperforming assets to loans and other real
estate owned declined for the sixth consecutive year to 0.38% at year end. The
reserve for loan losses was $751.8 million, or 1.87% of loans, at December 31,
1997. Net charge-offs for 1997 were $91.0 million, or 0.24% of average loans.
At December 31, 1997, total assets of SunTrust were $58.0 billion, a 10.5%
increase from December 31, 1996. In other year-to-year comparisons, loans
increased 13.4% to $40.1 billion and total shareholders' equity increased 6.5%
to $5.2 billion.
USE OF PROCEEDS
The Corporation currently intends to use the net proceeds from the sale of
the Senior Debentures for general corporate purposes, which may include
reduction of short-term indebtedness, including commercial paper, repayment of
long-term indebtedness, repurchase of equity securities (including purchases by
the Corporation of its common stock pursuant to its ongoing stock purchase
program), investments at the holding company level, investments in, or
extensions of credit to, its banking and other subsidiaries and other banks and
companies engaged in other financial service activities, and possible
acquisitions. Pending such use, the net proceeds may be temporarily invested.
S-2
<PAGE> 3
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth the selected consolidated historical
financial information for the five years ended December 31, 1996 and the nine
months ended September 30, 1997 and 1996, which is qualified in its entirety by,
and should be read in conjunction with, the consolidated financial statements,
including the notes thereto, and other detailed financial information included
in the documents incorporated by reference in the Prospectus. See "Incorporation
of Certain Documents by Reference" therein.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations
Interest and dividend income.............. $ 2,696.4 $ 2,399.5 $ 3,246.0 $ 3,027.2 $ 2,552.3 $ 2,362.3 $ 2,537.6
Interest expense.......................... 1,287.4 1,077.6 1,461.8 1,350.8 932.5 790.7 975.0
--------- --------- --------- --------- --------- --------- ---------
Net interest income....................... 1,409.0 1,321.9 1,784.2 1,676.4 1,619.8 1,571.6 1,562.6
Provision for loan losses................. 84.4 81.2 115.9 112.1 137.8 189.1 234.2
--------- --------- --------- --------- --------- --------- ---------
Net interest income after provision
before loan losses...................... 1,324.6 1,240.7 1,668.3 1,564.3 1,482.0 1,382.5 1,328.4
Noninterest income........................ 686.8 611.0 818.0 713.1 699.9 726.5 672.7
Noninterest expense....................... 1,251.7 1,184.0 1,583.1 1,451.5 1,400.0 1,408.4 1,425.3
--------- --------- --------- --------- --------- --------- ---------
Income before provision for income
taxes................................... 759.7 667.7 903.2 825.9 781.9 700.6 575.8
Provision for income taxes................ 264.6 209.6 286.6 260.4 259.2 226.9 171.4
--------- --------- --------- --------- --------- --------- ---------
Net income................................ $ 495.1 $ 458.1 $ 616.6 $ 565.5 $ 522.7 $ 473.7 $ 404.4
========= ========= ========= ========= ========= ========= =========
Per common share
Net income -- diluted..................... $ 2.31 $ 2.04 $ 2.76 $ 2.47 $ 2.25 $ 1.99 $ 1.67
Net income-basic.......................... 2.34 2.07 2.80 2.51 2.27 2.02 1.67
Dividends declared........................ 0.68 0.60 0.83 0.74 0.66 0.58 0.52
Common dividend payout ratio.............. 29.0% 29.3% 29.8% 29.8% 30.1% 30.6% 32.7%
Selected Average Balances
Total assets.............................. $53,499.9 $46,932.4 $47,718.8 $43,072.6 $40,489.2 $37,524.9 $35,356.5
Earning assets............................ 46,331.0 41,182.0 41,831.0 38,401.4 36,111.0 34,047.3 32,008.6
Loans..................................... 36,938.7 32,247.1 32,792.5 29,709.3 26,412.6 24,162.8 22,489.1
Deposits.................................. 35,906.9 34,040.1 34,241.3 31,808.7 30,877.8 29,683.3 28,609.6
Realized shareholders' equity............. 3,161.3 3,240.3 3,263.9 3,052.3 2,960.1 2,875.1 2,697.9
At Period End
Total assets.............................. $55,454.2 $49,632.7 $52,468.2 $46,471.5 $42,709.1 $40,728.4 $37,789.3
Earning assets............................ 47,857.0 43,093.9 45,182.1 40,530.0 38,045.6 35,904.5 34,167.7
Loans..................................... 38,475.5 33,824.3 35,404.2 31,301.4 28,548.9 25,292.1 23,493.5
Reserve for loan losses................... 747.1 724.7 725.8 698.9 647.0 561.2 474.2
Deposits.................................. 36,217.1 34,974.2 36,890.4 33,183.2 32,218.4 30,485.8 29,883.0
Long-term debt............................ 3,026.2 1,563.9 1,565.3 1,002.4 930.4 630.4 554.0
Realized shareholders' equity............. 3,111.2 3,271.5 3,278.2 3,111.0 2,883.3 2,845.8 2,769.7
Total shareholders' equity................ 4,989.1 4,778.7 4,880.0 4,269.6 3,453.3 3,609.6 2,769.7
Ratios
Return on total assets.................... 1.31% 1.37% 1.35% 1.36% 1.32% 1.26% 1.14%
Return on realized shareholders' equity... 20.94 18.88 18.89 18.53 17.66 16.48 14.99
Net interest margin....................... 4.15 4.39 4.36 4.49 4.64 4.80 5.10
Total shareholders' equity/assets......... 9.00 9.63 9.30 9.19 8.09 8.86 7.33
Nonperforming assets to total loans plus
other real estate owned................. 0.50 0.71 0.72 0.80 0.96 1.61 2.30
Risk based capital ratios
Tier 1 capital.......................... 7.58 7.78 7.46 7.78 7.95 8.88 9.37
Total capital........................... 11.17 11.30 10.87 9.71 10.05 10.55 11.35
Tier 1 leverage ratio..................... 6.63 6.63 6.40 6.71 6.68 6.82 7.27
</TABLE>
S-3
<PAGE> 4
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of the Corporation. The consolidated ratio of earnings to fixed
charges has been computed by dividing (i) net income plus all applicable income
taxes plus fixed charges by (ii) fixed charges. Fixed charges represent interest
expense (ratios are presented both excluding and including interest on
deposits), and the portion of net rental expense which is deemed to be
equivalent to interest on long-term debt. Interest expense (other than on
deposits) includes interest on long-term debt, federal funds purchased and
securities sold under agreements to repurchase, mortgages, commercial paper and
other funds borrowed.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- --------------------------------
1997 1996 1996 1995 1994 1993 1992
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Including interest on deposits...................... 1.58x 1.61x 1.61x 1.61x 1.83x 1.87x 1.58x
Excluding interest on deposits...................... 2.74x 3.41x 3.30x 3.20x 4.24x 5.07x 4.70x
</TABLE>
DESCRIPTION OF SENIOR DEBENTURES
The following description of the Senior Debentures (referred to in the
accompanying Prospectus as the "Senior Debt Securities") supplements, and to the
extent inconsistent therewith, replaces, the description of the general terms
and provisions of the Senior Debt Securities set forth in the accompanying
Prospectus, to which description reference is hereby made. Capitalized terms
used and not defined herein have the meaning set forth in the accompanying
Prospectus.
GENERAL
The Senior Debentures will be limited to $250,000,000 aggregate principal
amount and will mature on January 15, 2028. The Senior Debentures may not be
redeemed by the Corporation prior to the stated maturity and are not entitled to
any sinking fund. The Senior Debentures will be issued in fully registered form
only, without coupons. As discussed below, payment of the principal of, and
interest on, the Senior Debentures represented by a permanent global Senior
Debenture or Senior Debentures registered in the name of or held by DTC (as
defined below) or its nominee will be made in immediately available funds to DTC
or its nominees, as the case may be, as the registered owner and holder of such
permanent global Senior Debenture or Senior Debentures. See "-- Same-Day
Settlement and Payment." The Senior Debentures will be issued pursuant to an
Indenture (the "Senior Indenture") dated as of May 1, 1993, between the
Corporation and PNC Bank, National Association, as Trustee. The Senior
Debentures constitute a single series of Senior Debt Securities under the Senior
Indenture.
INTEREST
The Senior Debentures will bear interest at the rate of 6% per annum from
January 21, 1998 or from the most recent Interest Payment Date to which interest
has been paid or provided for, payable semiannually on January 15 and July 15 of
each year (each an "Interest Payment Date"), commencing July 15, 1998, provided
that, if an Interest Payment Date would otherwise fall on a day that is not a
Business Day, such Interest Payment Date will be the following day that is a
Business Day. Interest payable on any Interest Payment Date will be payable to
the persons in whose names the Senior Debentures are registered at the close of
business on the January 1 and July 1 next preceding the Interest Payment Date.
Interest on the Senior Debentures will be calculated based on a 360-day year
consisting of twelve 30-day months.
REDEMPTION AT OPTION OF HOLDER
The Senior Debentures may be redeemed in whole or in part (in integral
multiples of $1,000) at the option of the registered holders thereof on January
15, 2008 (or, if January 15, 2008 is not a Business Day, the next succeeding
Business Day) at 100% of the principal amount to be redeemed, together with any
accrued and unpaid interest thereon to January 15, 2008. Under certain
circumstances, the Senior Debentures may be
S-4
<PAGE> 5
issued in definitive registered form. See "-- Book-Entry System." If a
registered holder of a Senior Debenture in definitive registered form elects to
exercise the redemption option with respect to such Senior Debenture or a
portion thereof (which election is irrevocable when made), such Senior Debenture
must be received, together with the form entitled "Redemption Notice" on the
reverse side of the Senior Debenture duly completed, by the Trustee, no earlier
than November 15, 2007 and no later than 5:00 p.m., New York City time, on
December 15, 2007 (or, if December 15, 2007 is not a Business Day, the next
succeeding Business Day).
If a Senior Debenture is represented by a Book-Entry Security (as defined
below under "-- Book-Entry System"), the nominee will be the holder thereof
entitled to exercise a right of redemption. In order to ensure that the nominee
will exercise in a timely manner a right to repayment with respect to a
particular Senior Debenture, the beneficial owner of an interest in such Senior
Debenture must instruct the broker or the direct or indirect participant (as
defined below under "-- Book-Entry System") through which it holds an interest
in such Senior Debenture to notify the Depositary of its desire to exercise a
right to repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each such beneficial owner
should consult the broker or the direct or indirect participant through which it
holds an interest in a Senior Debenture in order to ascertain the cut-off time
by which such instruction must be given in order for timely notice to be
delivered to the Depositary.
If a registered holder of a Senior Debenture elects to exercise the
redemption option with respect to a portion of a Senior Debenture, the
Corporation shall issue to such holder a new Senior Debenture in an aggregate
principal amount equal to the portion of the principal amount of such Senior
Debenture as to which the redemption option has not been exercised. With respect
to any Senior Debentures (or portions thereof) as to which the redemption option
has been exercised, unless the Corporation defaults in the payment of the
redemption price on January 15, 2008 (or, if January 15, 2008 is not a Business
Day, the next succeeding Business Day) with respect to such Senior Debentures,
interest on such Senior Debenture will cease to accrue as of such date. The
Corporation will comply with the requirements of Rule 14e-1 under the Securities
Exchange Act of 1934, as amended, and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable to any
redemption of the Senior Debentures.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any Senior Debenture for redemption will be
determined by the Corporation, whose determination will be final and binding.
The deposit of the redemption price shall be made by the Corporation and
received by the Trustee no later than January 15, 2008 (or, if January 15, 2008
is not a Business Day, the next succeeding Business Day). As discussed below,
payment of the redemption price with respect to any Senior Debentures (or
portions thereof) represented by a permanent global Senior Debenture or Senior
Debentures registered in the name of or held by DTC or its nominee will be made
in immediately available funds to DTC or its nominees, as the case may be, as
the registered owner and holder of such permanent global Senior Debenture or
Senior Debentures. See "-- Same-Day Settlement and Payment."
DEFEASANCE AND COVENANT DEFEASANCE
The defeasance provisions of the Senior Indenture described under
"Description of Debt Securities -- Defeasance and Covenant Defeasance" in the
Prospectus will apply to the Senior Debentures.
BOOK-ENTRY SYSTEM
The Senior Debentures initially will be represented by one or more
book-entry securities (the "Book-Entry Securities") deposited with The
Depository Trust Company ("DTC") and registered in the name of a nominee of DTC.
The term "Depositary" refers to DTC or any successor depositary. The Depositary
currently limits the maximum denomination of any book-entry security to
$200,000,000. Therefore, for purposes of this Prospectus Supplement, "Book-Entry
Security" refers to the Book-Entry Securities representing the entire issue of
the Senior Debentures. Except as set forth below, the Senior Debentures will be
available for purchase in denominations of $1,000 and integral multiples thereof
in book-entry form only. Except in the limited circumstances as described under
"Description of the Debt Securities -- Book-Entry Securities" in the
S-5
<PAGE> 6
Prospectus, owners of beneficial interests in the Book-Entry Securities will not
be entitled to have Senior Debentures represented by such Book-Entry Securities
registered in their names, will not receive or be entitled to receive physical
delivery of such Senior Debentures in definitive form, and will not be
considered the owners or holders thereof under the Senior Indenture.
DTC has advised the Corporation that it is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities of persons who have accounts with DTC
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly. The rules applicable to DTC and its participants
are on file with the Commission.
For additional information regarding the Book-Entry System, see
"Description of the Debt Securities -- Book-Entry Securities" in the Prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Senior Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest and any
redemption price will be made by the Corporation in immediately available funds
or the equivalent. The Senior Debentures will trade in the Depositary's Same-Day
Funds Settlement System until maturity, and secondary market trading activity in
the Senior Debentures will therefore be required by the Depositary to settle in
immediately available funds. No assurance can be given as to the effect, if any,
of settlement in immediately available funds on trading activity in the Senior
Debentures.
S-6
<PAGE> 7
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date of this Prospectus Supplement, the Corporation has agreed to sell
to each of the Underwriters named below (the "Underwriters"), and each of the
Underwriters has severally agreed to purchase from the Corporation, the
principal amount of Senior Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
- ----------- ------------
<S> <C>
Lehman Brothers Inc. ....................................... $210,000,000
Chase Securities Inc. ...................................... 25,000,000
SunTrust Equitable Securities Corporation................... 15,000,000
------------
Total..................................................... $250,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligation of the Underwriters
is subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all of the Senior Debentures if any are purchased.
The Corporation has been advised that the Underwriters propose initially to
offer the Senior Debentures directly to the public at the public offering price
set forth on the cover page of this Prospectus Supplement, and to certain
selected dealers at such price less a concession not in excess of 0.25% of the
principal amount. The Underwriters may allow and such dealers may reallow a
concession not in excess of 0.125% of the principal amount to certain other
dealers. After the initial public offering, the public offering price and such
concessions may be changed.
In connection with the Offering, the rules of the Commission permit the
Underwriters to engage in certain transactions that stabilize the price of the
Senior Debentures. Such transactions may consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Senior Debentures.
If the Underwriters create a short position in the Senior Debentures in
connection with the Offering (i.e., if they sell a larger principal amount of
the Senior Debentures than is set forth on the cover page of this Prospectus
Supplement), the Underwriters may reduce the short position by purchasing Senior
Debentures in the open market.
In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases.
Neither the Corporation nor any of the Underwriters makes 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 Senior Debentures.
In addition, neither the Corporation nor any of the Underwriters makes any
representation that the Underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
The Corporation has been advised by Lehman Brothers Inc. and Chase
Securities Inc. that they intend to make a market in the Senior Debentures, but
Lehman Brothers Inc. and Chase Securities Inc. are not obligated to do so and
may discontinue making a market at any time without notice. The Corporation
currently has no intention to list the Senior Debentures on any securities
exchange, and there can be no assurance given as to the liquidity of the trading
market for the Senior Debentures.
The Underwriting Agreement provides that the Corporation will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
The Corporation is the parent of SunTrust Equitable Securities Corporation,
a member of the National Association of Securities Dealers, Inc. (the "NASD").
SunTrust Equitable Securities Corporation will serve as a co-manager for this
Offering. This Offering will be made in compliance with Rule 2720 of the NASD
Conduct Rules.
S-7
<PAGE> 8
The Underwriters may not confirm sales to any accounts over which they
exercise discretionary authority without the prior specific written approval of
the transaction by the customer.
Each Underwriter may be a customer of, engage in transactions with, or
perform services for the Corporation in the ordinary course of business.
LEGAL MATTERS
The legality of the Senior Debentures will be passed upon for the
Corporation by King & Spalding, New York, New York. Certain other legal matters
will be passed upon by Raymond D. Fortin, Esq., Senior Vice President and
Corporate Secretary of the Corporation, and for the Underwriters by Skadden,
Arps, Slate, Meagher & Flom LLP, New York, New York. As of December 31, 1997,
Mr. Fortin was the record and beneficial owner of 20,800 shares of the common
stock of SunTrust and held options to purchase 3,000 shares of the common stock
of SunTrust. Skadden, Arps, Slate, Meagher & Flom LLP will rely upon the opinion
of King & Spalding and of Mr. Fortin as to matters of Georgia law, and Mr.
Fortin will rely upon the opinion of King & Spalding as to matters of New York
law.
S-8
<PAGE> 9
PROSPECTUS
$500,000,000
SUNTRUST BANKS, INC.
DEBT SECURITIES
---------------------
SunTrust Banks, Inc., a Georgia corporation (the "Corporation"), from time
to time may offer and sell debt securities consisting of debentures, notes or
other evidences of indebtedness in one or more series in an aggregate initial
offering price not to exceed $500,000,000 or its equivalent based on the
applicable exchange rate at the time of the offering if denominated in foreign
currencies (the "Debt Securities"). The Debt Securities may be unsecured and
unsubordinated Debt Securities (the "Senior Debt Securities") or unsecured and
subordinated Debt Securities (the "Subordinated Debt Securities"). The Debt
Securities may be offered as separate series in amounts, at maturities, at
prices and on terms to be determined at the time of the sale as set forth in the
applicable prospectus supplement to this Prospectus (each, a "Prospectus
Supplement"). Although the aggregate initial offering price of the Debt
Securities is limited as set forth above, the respective indentures pursuant to
which the Senior Debt Securities and the Subordinated Debt Securities are to be
issued do not contain any limitation on the aggregate principal amount of the
debt securities covered thereby. The Senior Debt Securities when issued will
rank on a parity with all other unsecured and unsubordinated indebtedness of the
Corporation, and the Subordinated Debt Securities will be unsecured and will be
subordinate to Senior Indebtedness of the Corporation and, under certain
circumstances, to Additional Senior Obligations of the Corporation, each as
defined herein. Payment of principal of the Subordinated Debt Securities may be
accelerated only in the case of the bankruptcy of the Corporation. There is no
right of acceleration in the case of a default in the payment of the principal
of, or any premium or interest on, the Subordinated Debt Securities or in the
performance of any covenant or agreement of the Corporation. See "Description of
the Debt Securities."
When a particular series of Debt Securities is offered, a Prospectus
Supplement will be delivered setting forth the terms of such Debt Securities,
including the specific designation, aggregate principal amount, denominations,
maturity, premium, if any, interest rate (which may be fixed or variable) and
time of payment of interest, if any, terms for redemption at the option of the
Corporation or the holder, if any, terms for sinking fund payments, if any,
subordination terms, if any, and any other terms of such Debt Securities, or
otherwise in connection with the offering and sale of the Debt Securities in
respect of which the Prospectus Supplement is being delivered. In addition, the
Prospectus Supplement will set forth the initial public offering price, the
names of any underwriters or agents, the principal amounts, if any, to be
purchased by underwriters, the compensation of such underwriters and agents, if
any, and the net proceeds to the Corporation. The Debt Securities of a series
may be issued in definitive registered form without coupons ("Registered
Securities") or in the form of one or more book-entry securities in registered
form ("Book-Entry Securities").
The Debt Securities may be sold directly by the Corporation to the public
or through agents designated from time to time, through underwriting syndicates
led by one or more managing underwriters or through one or more underwriters
acting alone. If the Corporation, directly or through agents, solicits offers to
purchase the Debt Securities, the Corporation reserves the sole right to accept
and, together with its agents, to reject in whole or in part any proposed
purchase of Debt Securities. See "Plan of Distribution." Any underwriters,
dealers or agents participating in the offering may be deemed "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). See "Plan of Distribution" for possible indemnification arrangements for
underwriters, agents and their controlling persons.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE THE SALE OF DEBT SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. THE DEBT SECURITIES WILL BE
UNSECURED OBLIGATIONS OF THE CORPORATION, WILL NOT BE SAVINGS ACCOUNTS, DEPOSITS
OR OTHER OBLIGATIONS OF ANY BANK OR NONBANK SUBSIDIARY OF THE CORPORATION, AND
WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS AUGUST 19, 1996.
<PAGE> 10
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the Commission's
Regional Offices in New York (13th Floor, 7 World Trade Center, New York, New
York 10048) and Chicago (Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511). The Commission also maintains a Web site at http://www.sec.gov.
which contains reports, proxy statements and other information regarding
registrants that file electronically with the Commission. In addition, such
reports, proxy statements and other information concerning the Corporation can
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. This Prospectus does not contain all the information set
forth in the Registration Statements on Form S-3 of which this Prospectus is a
part (together with all exhibits and amendments, the "Registration Statements"),
which the Corporation has filed with the Commission under the Securities Act and
to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus the
following reports filed with the Commission pursuant to the Exchange Act: (a)
its Annual Report on Form 10-K for the year ended December 31, 1995, (b) its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June
30, 1996, and (c) its Report on Form 8-K, dated February 12, 1996.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and shall be deemed
a part hereof from the respective dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Corporation will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated by reference herein,
except for exhibits to such documents unless such exhibits are specifically
incorporated by reference into such documents. Written requests should be sent
to: James C. Armstrong, First Vice President -- Investor Relations, SunTrust
Banks, Inc., 303 Peachtree Street, N.E., Atlanta, Georgia 30308. Telephone
requests may be directed to 404-588-7425.
THE CORPORATION
The Corporation is a regional bank holding company headquartered at 303
Peachtree Street, N.E., Atlanta, Georgia 30308, telephone number 404-588-7711.
The three principal subsidiaries of the Corporation are SunTrust Banks of
Florida, Inc., headquartered in Orlando, Florida ("STB of Florida"), SunTrust
Banks of Georgia, Inc., headquartered in Atlanta, Georgia ("STB of Georgia"),
and SunTrust Banks of Tennessee, Inc., headquartered in Nashville, Tennessee
("STB of Tennessee").
The Corporation, through its subsidiary banks (the "Subsidiary Banks"),
conducts a broad range of commercial banking activities, including accepting
demand, time and savings deposits, making both secured and unsecured business
and consumer loans and leases, extending commercial lines of credit, issuing and
servicing credit cards and certain other types of revolving credit accounts,
providing commercial factoring services, cash management services, investment
counseling, safe deposit services, personal and corporate trust and other
fiduciary services and engaging in leasing, mortgage banking, correspondent
banking, international banking, investment banking, trading in U.S. government
securities and municipal bonds and underwriting certain types of general
obligation municipal bonds.
2
<PAGE> 11
USE OF PROCEEDS
The Corporation currently intends to use the net proceeds from the sale of
any Debt Securities for general corporate purposes, which may include reduction
of short-term indebtedness, including commercial paper, repayment of long-term
indebtedness, repurchase of equity securities (including repurchases by the
Corporation of its common stock pursuant to its ongoing stock repurchase
program), investments at the holding company level, investments in, or
extensions of credit to, its banking and other subsidiaries and other banks and
companies engaged in other financial service activities, possible acquisitions
and such other purposes as may be stated in any Prospectus Supplement. Pending
such use, the net proceeds may be temporarily invested. The precise amounts and
timing of the application of proceeds will depend upon the funding requirements
of the Corporation and its subsidiaries and the availability of other funds.
Except as may be described in any Prospectus Supplement, specific allocations of
the proceeds to such purposes will not have been made at the date of such
Prospectus Supplement.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table presents the consolidated ratio of earnings to fixed
charges of the Corporation. The consolidated ratio of earnings to fixed charges
has been computed by dividing net income plus all applicable income taxes plus
fixed charges by fixed charges. Fixed charges represent interest expense (ratios
are presented both including and excluding interest on deposits), and the
portion of net rental expense which is deemed to be equivalent to interest on
long-term debt. Interest expense (other than on deposits) includes interest on
long-term debt, federal funds purchased and securities sold under agreements to
repurchase, mortgages, commercial paper and other funds borrowed.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- --------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Including interest on deposits......... 1.61 1.63 1.61 1.83 1.87 1.58 1.35
Excluding interest on deposits......... 3.41 3.36 3.20 4.24 5.07 4.70 3.45
</TABLE>
3
<PAGE> 12
CERTAIN REGULATORY CONSIDERATIONS
The following discussion sets forth certain of the elements of the
comprehensive regulatory framework applicable to bank holding companies and
banks and provides certain specific information relevant to the Corporation and
its subsidiaries. Federal and state regulation of financial institutions such as
the Corporation and the Subsidiary Banks is intended primarily for the
protection of depositors and the Federal deposit insurance funds rather than
shareholders or other creditors.
GENERAL
As a bank holding company, the Corporation is subject to the regulation and
supervision of the Federal Reserve Board. The Corporation's Subsidiary Banks are
subject to regulation, supervision and examination by applicable state and
federal banking agencies, including the Federal Reserve Board, the Office of the
Comptroller of the Currency (the "Comptroller") and the Federal Deposit
Insurance Corporation (the "FDIC").
The federal banking agencies have broad enforcement powers over depository
institutions, including the power to terminate deposit insurance, to impose
substantial fines and other civil and criminal penalties, and to appoint a
conservator or receiver if any of a number of conditions are met. The federal
banking agencies also have broad enforcement powers over bank holding companies,
including the power to impose substantial fines and other civil and criminal
penalties.
Almost every aspect of the operations and financial condition of the
Subsidiary Banks is subject to extensive regulation and supervision and to
various requirements and restrictions under federal and state law, including
requirements governing capital adequacy, liquidity, earnings, dividends,
reserves against deposits, management practices, branching, loans, investments,
and the provision of services. Various consumer protection laws and regulations
also affect the operations of the Subsidiary Banks. The activities and
operations of the Corporation also are subject to extensive federal supervision
and regulation which, among other things, limit non-banking activities, impose
minimum capital requirements and require approval to acquire more than 5% of any
class of voting shares or substantially all of the assets of a bank or other
company. In addition to the impact of regulation, banks and bank holding
companies may be significantly affected by legislation, which can change banking
statutes in substantial and unpredictable ways, and by the actions of the
Federal Reserve Board as it attempts to control the money supply and credit
availability in order to influence the economy.
PAYMENT OF DIVIDENDS AND OTHER RESTRICTIONS
The Corporation is a legal entity separate and distinct from its
subsidiaries, including the Subsidiary Banks. There are various legal and
regulatory limitations under federal and state law on the extent to which the
Corporation's subsidiaries, including its bank and bank holding company
subsidiaries, can finance or otherwise supply funds to the Corporation.
The principal source of the Corporation's cash revenues is dividends from
its subsidiaries and there are certain limitations under federal, Georgia,
Florida, Tennessee and Alabama law on the payment of dividends by such
subsidiaries. The prior approval of the Federal Reserve Board or the
Comptroller, as the case may be, is required if the total of all dividends
declared by any state member bank of the Federal Reserve System or any national
banking association in any calendar year exceeds the bank's net profits (as
defined) for that year combined with its retained net profits for the preceding
two calendar years, less any required transfers to surplus or a fund for the
retirement of any preferred stock. In addition, a dividend may not be paid if a
bank's losses equal or exceed its net profits, and a dividend may not be paid in
excess of a bank's net profits after deduction of losses and bad debts in excess
of the allowance for loan and lease losses. The relevant federal and state
regulatory agencies also have authority to prohibit a state member bank or bank
holding company, which would include STB of Florida, STB of Georgia and STB of
Tennessee, or a national banking association from engaging in what, in the
opinion of such regulatory body, constitutes an unsafe or unsound practice in
conducting its business. The payment of dividends could, depending upon the
financial condition of the subsidiary, be deemed to constitute such an unsafe or
unsound practice.
4
<PAGE> 13
Under Georgia law (which would apply to any payment of dividends by the
Corporation's largest subsidiary, SunTrust Bank, Atlanta, to STB of Georgia) the
prior approval of the Georgia Commissioner of Banking and Finance is required
before any cash dividends may be paid by a state bank if: (i) total classified
assets at the most recent examination of such bank exceed 80% of the equity
capital (as defined, which includes the reserve for loan losses) of such bank;
(ii) the aggregate amount of dividends declared or anticipated to be declared in
the calendar year exceeds 50% of the net profits (as defined) for the previous
calendar year; or (iii) the ratio of equity capital to adjusted total assets is
less than 6%.
Retained earnings of the Corporation's banking subsidiaries available for
payment of cash dividends under all applicable regulations without obtaining
governmental approval were approximately $427 million as of June 30, 1996.
In addition, the Subsidiary Banks and their subsidiaries are subject to
limitations under Sections 23A and 23B of the Federal Reserve Act with respect
to extensions of credit to, investments in, and certain other transactions with,
the Corporation and its other subsidiaries. Furthermore, such loans and
extensions of credit, as well as certain other transactions, are also subject to
various collateral requirements.
CAPITAL ADEQUACY
The federal bank regulatory agencies have adopted minimum risk-based and
leverage capital guidelines for United States banking organizations. The minimum
required risk-based capital ratio of qualifying total capital to risk-weighted
assets (including certain off-balance-sheet items, such as standby letters of
credit) is 8%, of which 4% must consist of Tier 1 capital. As of June 30, 1996,
the Company's total risk-based capital ratio was 10.60%, including 7.86% of Tier
1 capital. The minimum required leverage capital ratio (Tier 1 capital to
average total assets) is 3% for banking organizations that meet certain
specified criteria, including that they have the highest regulatory rating. As
of June 30, 1996, the Company's leverage capital ratio was 6.58%. Higher
risk-based and leverage ratios may apply to banking organizations under certain
circumstances.
Failure to meet capital guidelines can subject a banking organization to a
variety of enforcement remedies, including additional substantial restrictions
on its operations and activities, termination of deposit insurance by the FDIC,
and under certain conditions the appointment of a receiver or conservator.
Federal banking regulations establish five capital categories for
depository institutions ("well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized"), and impose significant restrictions on the operations of an
institution that is not at least adequately capitalized. Under certain
circumstances, an institution may be downgraded to a category lower than that
warranted by its capital levels, and subjected to the supervisory restrictions
applicable to institutions in the lower capital category. A depository
institution is generally prohibited from making capital distributions (including
paying dividends) or paying management fees to a holding company if the
institution would thereafter be undercapitalized. Adequately capitalized
institutions may accept brokered deposits only with a waiver from the FDIC and
are subject to restrictions on the interest rates that can be paid on such
deposits. Undercapitalized institutions may not accept, renew, or roll over
brokered deposits.
An undercapitalized depository institution is also subject to restrictions
in a number of areas, including asset growth, acquisitions, branching, new lines
of business, and borrowing from the Federal Reserve System. In addition, an
undercapitalized depository institution is required to submit a capital
restoration plan. A depository institution's holding company must guarantee the
capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to restore the capital of the institution to the levels required for the
institution to be classified as adequately capitalized at the time the
institution fails to comply with the plan and any such guarantee would be
entitled to a priority of payment in bankruptcy. A depository institution is
treated as if it is significantly undercapitalized if it fails to submit a
capital plan that is based on realistic assumptions and is likely to succeed in
restoring the depository institution's capital.
Significantly undercapitalized depository institutions may be subject to a
number of additional significant requirements and restrictions, including
requirements to sell sufficient voting stock to become adequately
5
<PAGE> 14
capitalized, to replace or improve management, to reduce total assets, to cease
acceptance of correspondent bank deposits, to restrict senior executive
compensation and to limit transactions with affiliates. Critically
undercapitalized depository institutions are further subject to restrictions on
paying principal or interest on subordinated debt, making investments,
expanding, acquiring or selling assets, extending credit for highly-leveraged
transactions, paying excessive compensation, amending their charters or bylaws
and making any material changes in accounting methods. In general, a receiver or
conservator must be appointed for a depository institution within 90 days after
the institution is deemed to be critically undercapitalized.
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve Board policy, the Corporation is expected to act as a
source of financial strength to, and to commit resources to support, each of the
Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve Board policy, the Corporation may not be inclined to provide it.
In the event of a bank holding company's bankruptcy, any commitment by the bank
holding company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank will be assumed by the bankruptcy trustee and entitled to a
priority of payment.
A depository institution insured by the FDIC can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with the default of a commonly controlled FDIC-insured depository
institution or any assistance provided by the FDIC to any commonly controlled
FDIC-insured depository institution "in danger of default". "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a default is likely to occur in the absence of regulatory assistance.
Liability for the losses of commonly-controlled depository institutions can lead
to the failure of some or all depository institutions in a holding company
structure, if the remaining institutions are unable to pay the liability
assessed by the FDIC. Any obligation or liability owed by a subsidiary bank to
its parent company or to an affiliate of the subsidiary bank is subordinate to
the subsidiary bank's cross-guarantee liability for losses of
commonly-controlled depository institutions.
FDIC INSURANCE ASSESSMENTS
Effective January 1, 1996, the FDIC amended its regulations on insurance
assessments to establish a new assessment rate schedule of $.00 to $.27 per $100
of deposits (subject to a minimum assessment of $2,000 per institution per year)
in replacement of the previous schedule of $.04 to $.31 per $100 of deposits for
institutions whose deposits are subject to assessment by the Bank Insurance Fund
("BIF"). The FDIC has maintained an assessment rate schedule of $.23 to $.31 per
$100 of deposits for the institutions whose deposits are subject to assessment
by the Savings Association Insurance Fund ("SAIF"). Legislation has been
proposed from time to time which, among other things, would reduce the SAIF
assessment rate schedule, impose a one-time special assessment charge on SAIF
deposits and, possibly, result in higher insurance premiums for BIF-assessed
deposits. The amount of any assessment or rate reduction will depend on
enactment of final legislation. The Corporation cannot predict whether any such
legislation will be enacted or the form of any final legislation. As of June 30,
1996, the Corporation had $2.1 billion of deposits resulting from thrift
acquisitions that are insured through SAIF.
INTERSTATE BANKING AND BRANCHING LEGISLATION
The Bank Holding Company Act previously prohibited the Federal Reserve
Board from approving an application from a bank holding company to acquire
shares of a bank located outside the state in which the operations of the
holding company's banking subsidiaries were principally conducted, unless such
an acquisition was specifically authorized by statute of the state in which the
bank whose shares were to be acquired was located. This restriction on
interstate acquisitions was abolished effective September 29, 1995, and bank
holding companies from any state now may acquire banks located in any other
state, subject to certain conditions, including nationwide and state imposed
concentration limits. Banks also will be able to branch across state lines by
acquisition, merger or de novo, effective June 1, 1997 (unless state law would
permit such interstate branching at an earlier date or would prohibit interstate
branching entirely), providing
6
<PAGE> 15
certain conditions are met including that applicable state law must expressly
permit interstate de novo branching and branch acquisitions.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which general provisions may apply to such Debt
Securities (the "Offered Debt Securities") will be described in the Prospectus
Supplement relating to such Offered Debt Securities (the "Applicable Prospectus
Supplement").
Senior Debt Securities will be issued from time to time in series under an
Indenture, dated as of May 1, 1993 (the "Senior Indenture"), between the
Corporation and PNC Bank, National Association, as Trustee (the "Senior
Trustee"). Subordinated Debt Securities will be issued under an Indenture, dated
as of May 1, 1993 (the "Subordinated Indenture"), between the Corporation and
The First National Bank of Chicago, as Trustee (the "Subordinated Trustee"). The
Senior Indenture and the Subordinated Indenture are sometimes herein referred to
collectively as the "Indentures" and the Senior Trustee and the Subordinated
Trustee are sometimes herein referred to collectively as the "Trustees". The
Indentures are incorporated by reference as exhibits to the Registration
Statements of which this Prospectus is a part.
The following summaries of certain provisions of the Senior Debt
Securities, the Subordinated Debt Securities, the Senior Indenture and the
Subordinated Indenture, as modified or superseded by the Applicable Prospectus
Supplement, are brief summaries of certain provisions thereof, do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture applicable to a particular series of
Debt Securities (the "Applicable Indenture"), including the definitions therein
of certain terms. Whenever particular provisions or defined terms in one or both
of the Indentures are referred to, such provisions or defined terms are
incorporated herein by reference. Numerical references in parentheses below are
references to the Applicable Indenture. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Applicable Indenture.
The Debt Securities will be limited to an aggregate initial offering price
of $500,000,000 or its equivalent based on the applicable exchange rate at the
time of the offering if denominated in foreign currencies and will be direct,
unsecured obligations of the Corporation. The Debt Securities will not be
deposits or other obligations of a bank and will not be insured by the FDIC, the
Bank Insurance Fund or other government agency. The Indentures do not limit the
aggregate principal amount of Debt Securities or of any particular series of
Debt Securities which may be issued thereunder and provide that Debt Securities
issued thereunder may be issued from time to time in one or more series, in each
case with the same or various maturities, at par or at a discount.
The Indentures do not limit the amount of other debt that may be issued by
the Corporation and do not contain financial or similar restrictive covenants.
As of June 30, 1996, the Corporation had an aggregate of $673 million of
long-term Senior Indebtedness (as defined below under "Subordination of the
Subordinated Debt Securities") outstanding and an aggregate of approximately
$529 million of short-term Senior Indebtedness outstanding which consisted
primarily of commercial paper. As of June 30, 1996, the Corporation had no
Additional Senior Obligations (as defined below) outstanding. The Corporation
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness and Additional Senior Obligations. The Indentures do not prohibit
or limit the incurrence of additional Senior Indebtedness or Additional Senior
Obligations. As of June 30, 1996, the Corporation had an aggregate of $400
million of long-term Subordinated Debt Securities outstanding. On July 1, 1996
the Corporation issued an additional $200,000,000 of long-term Subordinated Debt
Securities.
The Senior Debt Securities will be unsecured and will rank on a parity with
all other unsecured and unsubordinated indebtedness of the Corporation. The
Subordinated Debt Securities will be unsecured and will
7
<PAGE> 16
be subordinated and junior to all Senior Indebtedness and, in certain
circumstances relating to the dissolution, winding-up, liquidation or
reorganization of the Corporation, to all Additional Senior Obligations to the
extent set forth below under "Subordination of the Subordinated Debt
Securities". Because the Corporation is a holding company and a legal entity
separate and distinct from its subsidiaries, the rights of the Corporation to
participate in any distribution of assets of any subsidiary upon its liquidation
of assets or reorganization or otherwise (and thus the ability of Holders of
Debt Securities to benefit indirectly from such distribution) would be subject
to the prior claims of creditors of that subsidiary, except to the extent that
the Corporation itself may be a creditor of that subsidiary with recognized
claims. However, in the event of a liquidation or other resolution of an insured
depository institution, the claims of depositors and other general or
subordinated creditors are entitled to a priority of payment over the claims of
holders of any obligation of the institution to its shareholders, including any
depository institution holding company or any shareholder or creditor thereof.
Claims on the Corporation's subsidiary banks by creditors other than the
Corporation include long-term debt and substantial obligations with respect to
deposit liabilities and federal funds purchased, securities sold under
repurchase agreements, other short-term borrowings and various other financial
obligations. In addition, the Indentures and the Debt Securities will not
contain any provision that would provide protection to the Holders of the Debt
Securities against a sudden and dramatic decline in credit quality resulting
from a takeover, recapitalization or similar restructuring of the Corporation or
other event involving the Corporation that may adversely affect the credit
quality of the Corporation.
Reference is made to the Applicable Prospectus Supplement for the following
terms of the Offered Debt Securities offered thereby: (i) the title of the
Offered Debt Securities; (ii) whether the Offered Debt Securities are Senior
Debt Securities or Subordinated Debt Securities; (iii) any limit upon the
aggregate principal amount of the Offered Debt Securities and the percentage of
such principal amount at which such Offered Debt Securities may be issued; (iv)
the date or dates on which the principal of the Offered Debt Securities is
payable (the "Stated Maturity"); (v) the rate or rates of interest (which may be
fixed or variable) per annum at which the Offered Debt Securities will bear
interest, or the method of determining such rate or rates, if any; (vi) the date
or dates from which such interest, if any, will accrue, the Interest Payment
Dates on which any such interest will be payable, the Regular Record Date for
the interest payable on any Interest Payment Date, the Person to whom any
Offered Debt Security of such series will be payable, if other than the Person
in whose name that Offered Debt Security (or one or more predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest, and the extent to which, or the manner in which, any interest
payable on a permanent global Offered Debt Security on an Interest Payment Date
will be paid; (vii) if other than the location specified in this Prospectus, the
place or places where the principal of and premium, if any, and interest on the
Offered Debt Securities will be payable; (viii) the period or periods within
which, the price or prices at which and the terms and conditions upon which the
Offered Debt Securities will, pursuant to any mandatory sinking fund provisions
or otherwise, or may, pursuant to any optional sinking fund provisions or
otherwise, be redeemed in whole or in part by the Corporation; (ix) if
applicable, the period or periods within which, the price or prices at which and
the terms and conditions upon which the Offered Debt Securities may be repaid,
in whole or in part, at the option of the Holders thereof; (x) if other than
denominations of $1,000 and any integral multiple thereof, the denominations in
which the Offered Debt Securities shall be issuable; (xi) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Debt Securities which shall be payable upon declaration of acceleration of the
Stated Maturity thereof; (xii) if other than U.S. dollars, the currency or
currency unit of payment of principal and premium, if any, and interest on such
Offered Debt Securities, and any index used to determine the amount of payment
of principal or premium, if any, and interest on such Offered Debt Securities;
(xiii) whether the Offered Debt Securities are to be issuable in permanent
global form and, in such case, the initial depository with respect thereto and
the circumstances under which such permanent global Offered Debt Security may be
exchanged; (xiv) whether the subordination provisions summarized below or
different subordination provisions, including a different definition of "Senior
Indebtedness", "Entitled Persons", "Existing Subordinated Indebtedness" or
"Additional Senior Obligations", shall apply to the Offered Debt Securities;
(xv) any Events of Default applicable to such Offered Debt Securities (if not
set forth in the applicable Indenture), and any additional restrictive covenants
(if not set forth in the applicable Indenture) or different restrictive
covenants, but not inconsistent with the restrictive covenants contained in
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<PAGE> 17
the applicable Indenture; (xvi) if such Offered Debt Securities are Senior Debt
Securities, whether the provisions of the Senior Indenture relating to
"Defeasance and Covenant Defeasance" will be applicable to such series of
Offered Debt Securities; and (xvii) any other terms of the Offered Debt
Securities not specified in this Prospectus.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, on the Debt Securities will be
payable, and the Debt Securities will be transferable, at the Corporate Trust
Office of SunTrust Bank, Atlanta in Atlanta, Georgia, except that interest may
be paid at the option of the Corporation by check mailed to the address of the
Holder entitled thereto as it appears on the Security Register. The Corporation
will have the right to require a holder of any Debt Security, in connection with
the payment of the principal, premium, if any, and interest, if any, on such
Debt Security, to certify information to the Corporation or, in the absence of
such certification, the Corporation will be entitled to rely on any legal
presumption to enable the Corporation to determine its duties and liabilities,
if any, to deduct or withhold taxes, assessments or governmental charges from
such payment.
If the principal, premium, if any, or interest, if any, on any Debt
Securities are to be payable in any currency other than U.S. dollars or, at the
election of the Corporation or a holder thereof, in one or more currencies or
composite currencies, or if any index is used to determine the amount of
payments of principal, premium, if any, or interest, if any, on any series of
Debt Securities, any special Federal income tax, accounting and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto.
Unless otherwise indicated in the Applicable Prospectus Supplement, the
Debt Securities will be issued only in fully registered form, without coupons,
in denominations of $1,000 and any integral multiple thereof. No service charge
will be made for any registration of transfer or exchange of the Debt
Securities, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Both Senior Debt Securities and Subordinated Debt Securities may be issued
as Original Issue Discount Securities to be offered and sold at a substantial
discount below their stated principal amount. Federal income tax consequences
and other special considerations applicable to any such Original Issue Discount
Securities will be described in the Applicable Prospectus Supplement. "Original
Issue Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon the declaration of
acceleration of the Stated Maturity thereof in accordance with the terms of the
related Indenture.
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the maturity of a
portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Corporation has various credit agreements (as amended, the "Credit
Agreements"), between the Corporation and various credit banks, which contain
certain covenants of the Corporation, including a covenant that limits the
Corporation's Total Debt (as defined in the Credit Agreements) to an amount no
greater than its Net Worth (as defined in the Credit Agreements). As of June 30,
1996, the Corporation's Net Worth was approximately $4.6 billion. As of June 30,
1996, the Corporation had no indebtedness outstanding under the Credit
Agreements.
BOOK-ENTRY SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Book-Entry Securities that will be deposited with a Depositary or its nominee
identified in the Applicable Prospectus Supplement (Section 301). In such a
case, one or more Book-Entry Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of Offered Debt Securities of the series to be represented by such Book-Entry
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Book-Entry Security may not be
transferred except as a
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whole by the Depositary for such Book-Entry Security to a nominee of such
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor of the Depositary or a nominee of such successor (Section 305).
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Book-Entry
Security will be described in the Applicable Prospectus Supplement. The
Corporation anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Book-Entry Security, the Depositary for such
Book-Entry Security or its nominee will credit, on its book-entry registration
and transfer system, the respective principal amounts of the Securities
represented by such Book-Entry Security to the accounts of persons that have
accounts with such Depositary ("participants"). Such accounts shall be
designated by the underwriters or agents with respect to such Debt Securities or
by the Corporation if such Debt Securities are offered and sold directly by the
Corporation. Participants include securities brokers and dealers, banks and
trust companies, clearing corporations and certain other organizations. Access
to the Depositary's system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants"). Persons who are not participants may beneficially own Book-Entry
Securities held by the Depositary only through participants or indirect
participants.
Ownership of beneficial interests in any Book-Entry Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) for such Book-Entry Security and on the records of participants
(with respect to interests of indirect participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such laws, as well as the limits on participation
in the Depositary's book-entry system, may impair the ability to transfer
beneficial interests in a Book-Entry Security.
So long as the Depositary or its nominee is the registered owner of a
Book-Entry Security, such Depositary or such nominee will be considered the sole
owner or holder of the Debt Securities represented by such Book-Entry Security
for all purposes under the Applicable Indenture. Except as provided below,
owners of beneficial interests in Debt Securities represented by Book-Entry
Securities will not be entitled to have Debt Securities of the series
represented by such Book-Entry Security registered in their names, will not
receive or be entitled to receive physical delivery of such Debt Securities in
definitive form, and will not be considered the owners or holders thereof under
the Applicable Indenture.
Payments of principal of and any premium and interest on Debt Securities
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Book-Entry Security representing such Debt Securities. The Corporation expects
that the Depositary for a series of Debt Securities or its nominee, upon receipt
of any payment of principal, premium or interest, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Book-Entry
Security for such Debt Securities, as shown on the records of such Depositary or
its nominee. The Corporation also expects that payments by participants and
indirect participants to owners of beneficial interests in such Book-Entry
Security held through such persons will be governed by standing instructions and
customary practices, as is now the case with securities registered in "street
name", and will be the responsibility of such participants and indirect
participants. Neither the Corporation, the Trustee, any Authenticating Agent,
any Paying Agent, nor the Security Registrar for such Debt Securities will have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the Book-Entry
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests (Section 311).
If the Depositary for Debt Securities of a series notifies the Corporation
that it is unwilling or unable to continue as Depositary or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, the
Corporation has agreed to appoint a successor depositary. If such a successor is
not appointed by the Corporation within 90 days, the Corporation will issue Debt
Securities of such series in
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definitive registered form in exchange for the Book-Entry Security representing
such series of Debt Securities. In addition, the Corporation may at any time and
in its sole discretion determine that the Debt Securities of any series issued
in the form of one or more Book-Entry Securities shall no longer be represented
by such Book-Entry Security or Securities and, in such event, will issue Debt
Securities of such series in definitive registered form in exchange for such
Book-Entry Security or Securities representing such series of Debt Securities.
Further, if the Corporation so specifies with respect to the Debt Securities of
a series, or if an Event of Default, or an event which with notice, lapse of
time or both would be an Event of Default with respect to the Debt Securities of
such series has occurred and is continuing, an owner of a beneficial interest in
a Book-Entry Security representing Debt Securities of such series may receive
Debt Securities of such series in definitive registered form. In any such
instance, an owner of a beneficial interest in a Book-Entry Security will be
entitled to physical delivery in definitive registered form of Debt Securities
of the series represented by such Book-Entry Security equal in principal amount
to such beneficial interest and to have such Debt Securities registered in its
name (Section 305). Debt Securities so issued in definitive form will be issued
in denominations of $1,000 and integral multiples thereof and will be issued in
registered form only, without coupons.
SUBORDINATION OF THE SUBORDINATED DEBT SECURITIES
The obligations of the Corporation to make any payment on account of the
principal of and premium, if any, and interest, if any, on any Subordinated Debt
Securities will, to the extent set forth in the Subordinated Indenture, be
subordinate and junior in right of payment to all Senior Indebtedness of the
Corporation and, in certain circumstances relating to the dissolution,
winding-up, liquidation of or reorganization of the Corporation, to all
Additional Senior Obligations (Article 13).
"Senior Indebtedness" is defined in the Subordinated Indenture to mean (a)
all indebtedness of the Corporation for money borrowed, whether now outstanding
or subsequently created, assumed or incurred, other than (i) the Subordinated
Debt Securities, (ii) any obligation Ranking on a Parity with the Subordinated
Debt Securities, or (iii) any obligation Ranking Junior to the Subordinated Debt
Securities and (b) any deferrals, renewals or extensions of any such Senior
Indebtedness. The term "indebtedness of the Corporation for money borrowed" is
defined in the Subordinated Indenture to mean any obligation of, or any
obligation guaranteed by, the Corporation for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets acquired other than in the ordinary course of business.
"Additional Senior Obligations" is defined in the Subordinated Indenture to mean
all indebtedness of the Corporation, whether now outstanding or subsequently
created, assumed or incurred, for claims in respect of derivative products such
as interest and foreign exchange rate contracts, commodity contracts and similar
arrangements; provided, however, that Additional Senior Obligations do not
include (a) any claims in respect of Senior Indebtedness, or (b) any obligations
(i) Ranking Junior to the Subordinated Debt Securities, or (ii) Ranking on a
Parity with the Subordinated Debt Securities. For purposes of this definition,
"claims" shall have the meaning assigned thereto in Section 101(4) of the United
States Bankruptcy Code of 1978. The Subordinated Indenture does not limit or
prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations.
The term "Ranking Junior to the Subordinated Debt Securities" is defined in
the Subordinated Indenture to mean any obligation of the Corporation which (a)
ranks junior to and not equally with or prior to the Subordinated Debt
Securities in right of payment upon the happening of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt, marshalling
of assets and liabilities or similar proceedings or any liquidation or
winding-up of or relating to the Corporation as a whole, whether voluntary or
involuntary, and (b) is specifically designated as ranking junior to the
Subordinated Debt Securities by express provisions in the instrument creating or
evidencing such obligation (Section 101).
The term "Ranking on a Parity with the Subordinated Debt Securities" is
defined in the Subordinated Indenture to mean any obligation of the Corporation
which (a) ranks equally with and not prior to the Subordinated Debt Securities
in right of payment upon the happening of any insolvency, receivership,
conservatorship, reorganization, readjustment of debt, marshalling of assets and
liabilities or similar proceedings or any liquidation or winding-up of or
relating to the Corporation as a whole, whether voluntary or
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involuntary, and (b) is specifically designated as ranking on a parity with the
Subordinated Debt Securities by express provisions in the instrument creating or
evidencing such obligation (Section 101).
The Subordinated Debt Securities will be subordinate in right of payment to
all Senior Indebtedness, as provided in the Subordinated Indenture. No payment
on account of the principal of and premium, if any, or interest in respect of
the Subordinated Debt Securities may be made if there shall have occurred and be
continuing a default in payment with respect to Senior Indebtedness or an event
of default with respect to any Senior Indebtedness resulting in the acceleration
of the maturity thereof. Upon any payment or distribution of assets to creditors
upon any insolvency, receivership, conservatorship, reorganization, readjustment
of debt, marshalling of assets and liabilities or similar proceedings or any
liquidation or winding-up of or relating to the Corporation as a whole, whether
voluntary or involuntary, (a) the holders of all Senior Indebtedness will first
be entitled to receive payment in full before the Holders of the Subordinated
Debt Securities will be entitled to receive any payment in respect of the
principal of and premium, if any, or interest on the Subordinated Debt
Securities, and (b) if after giving effect to the operation of clause (a) above,
(i) any amount of cash, property or securities remains available for payment or
distribution in respect of the Subordinated Debt Securities ("Excess Proceeds"),
and (ii) creditors in respect of Additional Senior Obligations have not received
payment in full of amounts due or to become due thereon or payment of such
amounts has not been duly provided for, then such Excess Proceeds shall first be
applied to pay or provide for the payment in full of all such Additional Senior
Obligations before any payment may be made on the Subordinated Debt Securities.
If the Holders of Subordinated Debt Securities receive payment and are aware at
the time of receiving payment that all Senior Indebtedness and Additional Senior
Obligations have not been paid in full, then such payment shall be held in trust
for the benefit of the holders of Senior Indebtedness and/or Additional Senior
Obligations, as the case may be (Section 1301).
By reason of such subordination, in the event of insolvency, Holders of
Subordinated Debt Securities may recover less, ratably, than holders of Senior
Indebtedness and holders of Additional Senior Obligations. In addition, in the
event of insolvency, creditors of the Corporation who are not holders of Senior
Indebtedness or Holders of the Subordinated Debt Securities may recover less,
ratably, than the holders of Senior Indebtedness and may recover more, ratably,
than the Holders of the Subordinated Debt Securities.
The Applicable Prospectus Supplement may further describe the provisions,
if any, applicable to the subordination of the Subordinated Debt Securities of a
particular series.
RESTRICTION ON DISPOSITION OF VOTING STOCK OF CERTAIN SUBSIDIARIES
The Senior Indenture contains a covenant that, except as otherwise provided
below, the Corporation will not sell, assign, pledge, transfer or otherwise
dispose of, or permit the issuance of, or permit a Subsidiary to sell, assign,
pledge, transfer or dispose of, any shares of Voting Stock of any Subsidiary or
any securities convertible into Voting Stock of any Subsidiary which is: (a) a
Principal Constituent Bank; or (b) a Subsidiary which owns shares of Voting
Stock or any securities convertible into Voting Stock of a Principal Constituent
Bank; provided, however, that such covenant does not prohibit (i) any
dispositions made by the Corporation or any Subsidiary (A) acting in a fiduciary
capacity for any Person other than the Corporation or any Subsidiary or (B) to
the Corporation or any of its wholly owned (except for directors' qualifying
shares) Subsidiaries or (ii) the merger of a Principal Constituent Bank with and
into a Principal Constituent Bank or the consolidation of any Principal
Constituent Bank into a Principal Constituent Bank. Such covenant also does not
prohibit sales, assignments, pledges, transfers or other dispositions of shares
of Voting Stock of a corporation referred to in (a) or (b) above where: (i) the
sales, assignments, pledges, transfers or other dispositions are made, in the
minimum amount required by law, to any Person for the purpose of the
qualification of such Person to serve as a director; or (ii) the sales,
assignments, pledges, transfers or other dispositions are made in compliance
with an order of a court or regulatory authority of competent jurisdiction or as
a condition imposed by any such court or authority to the acquisition by the
Corporation, directly or indirectly, of any other corporation or entity; or
(iii) in the case of a disposition of shares of Voting Stock or any securities
convertible into Voting Stock of a Principal Constituent Bank, or sales of
Voting Stock or any securities convertible into Voting Stock of any Subsidiary
included in (b) above, the sales, assignments, pledges, transfers or other
dispositions are for fair market value (as determined by the Board of Directors
of
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the Corporation and the Subsidiary disposing of such shares or securities) and,
after giving effect to such disposition and to any potential dilution (if the
shares or securities are convertible into Voting Stock), the Corporation and its
directly or indirectly wholly owned (except for directors' qualifying shares)
Subsidiaries, will own directly not less than 80% of the Voting Stock of such
Principal Constituent Bank or Subsidiary; or (iv) a Constituent Bank sells
additional shares of Voting Stock to its shareholders at any price, so long as
immediately after such sale the Corporation owns, directly or indirectly, at
least as great a percentage of the Voting Stock of such Constituent Bank as it
owned prior to such sale of additional shares; or (v) a pledge is made or a lien
is created to secure loans or other extensions of credit by a Constituent Bank
subject to Section 23A of the Federal Reserve Act (Section 1005). Any
Constituent Bank the total assets of which equal more than 15% of the total
assets of all Constituent Banks is defined in the Senior Indenture to be a
"Principal Constituent Bank" (Section 101). As of June 30, 1996, SunTrust Bank,
Atlanta was the only Constituent Bank which is a Principal Constituent Bank.
The foregoing covenant is not a covenant for the benefit of the
Subordinated Debt Securities.
EVENTS OF DEFAULT
The Senior Indenture. The following are Events of Default under the Senior
Indenture with respect to Senior Debt Securities of any series: (a) failure to
pay any interest on any Debt Security of that series when due and payable,
continued for 30 days; (b) failure to pay principal of or any premium on any
Debt Security of that series when due; (c) failure to deposit any sinking fund
payment, when due, in respect of any Debt Security of that series; (d) failure
to perform any other covenant of the Corporation in the Senior Indenture (other
than a covenant included in the Senior Indenture solely for the benefit of
series of Debt Securities other than that series), continued for 90 days after
written notice as provided in the Senior Indenture; (e) the entry of a decree or
order for relief in respect of the Corporation by a court having jurisdiction in
the premises in an involuntary case under Federal or state bankruptcy laws and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; (f) the commencement by the Corporation of a voluntary
case under Federal or state bankruptcy laws or the consent by the Corporation to
the entry of a decree or order for relief in an involuntary case under any such
law; and (g) any other Event of Default provided with respect to Debt Securities
of that series (Section 501). If an Event of Default with respect to Debt
Securities of any series occurs and is continuing either the Senior Trustee or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Debt Securities of that series may declare by notice in writing to the
Corporation the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of that series) of all the Debt Securities of that
series to be due and payable immediately. At any time after a judgment or decree
based on acceleration has been obtained, the Holders of a majority in aggregate
principal amount of Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration (Section 502).
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the Stated Maturity of
a portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Senior Indenture provides that, subject to the duty of the Senior
Trustee during default to act with the required standard of care, the Senior
Trustee will be under no obligation to exercise any of its rights or powers
under the Senior Indenture at the request or direction of any of the Holders,
unless such Holders shall have offered to the Senior Trustee reasonable security
or indemnity (Section 603). Subject to such provisions for the indemnification
of the Senior Trustee and to certain other conditions, the Holders of a majority
in aggregate principal amount of the Outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceedings for any remedy available to the Senior Trustee, or exercising any
trust or power conferred on the Senior Trustee, with respect to the Debt
Securities of that series provided that the Senior Trustee may decline to act if
such direction is contrary to law or the Senior Indenture, would unduly
prejudice the rights of other Holders or would involve the Senior Trustee in
personal liability (Section 512).
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No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Senior Indenture, or for the
appointment of a receiver or trustee or for any remedy thereunder, unless such
Holder shall have previously given to the Senior Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that series
and unless the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Senior Trustee to institute such proceeding
as trustee, and the Senior Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days (Section 507). However, the Holder of any Debt
Security will have an absolute right to receive payment of the principal of (and
premium, if any) and interest on such Debt Security on the due dates expressed
in such Debt Security and to institute suit for the enforcement of any such
payment (Section 508).
The Corporation is required to furnish to the Senior Trustee annually a
statement as to performance by the Corporation of certain of its obligations
under the Senior Indenture and as to any default in such performance (Section
1006).
The Subordinated Indenture. The Subordinated Indenture (with respect to
any series of Subordinated Debt Securities) defines an "Event of Default" as any
one of the following events (whatever the reason and whether it be occasioned by
the subordination provisions or be voluntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administration or governmental body): (a) failure to pay any
interest on any Debt Security of that series when due and payable, continued for
30 days; (b) failure to pay principal of or any premium on any Debt Security of
that series when due; (c) failure to deposit any sinking fund payment, when due,
in respect of any Debt Security of that series; (d) failure to perform any other
covenant of the Corporation in the Subordinated Indenture (other than a covenant
included in the Subordinated Indenture solely for the benefit of series of Debt
Securities other than that series), continued for 90 days after written notice
as provided in the Subordinated Indenture; (e) the entry of a decree or order
for relief in respect of the Corporation by a court having jurisdiction in the
premises in an involuntary case under Federal or state bankruptcy laws and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; (f) the commencement by the Corporation of a voluntary case
under Federal or state bankruptcy laws or the consent by the Corporation to the
entry of a decree or order for relief in an involuntary case under any such law;
and (g) any other Event of Default provided with respect to Debt Securities of
that series (Section 501).
Unless specifically stated in the Applicable Prospectus Supplement for a
particular series of Subordinated Debt Securities, the payment of the principal
of the Subordinated Debt Securities may be accelerated only upon the occurrence
of an Event of Default described in clause (e) or clause (f) of the preceding
paragraph (a "Bankruptcy Event of Default") and there is no right of
acceleration of the payment of principal of the Subordinated Debt Securities of
such series upon a default in the payment of principal, premium, if any, or
interest, if any, or in the performance of any covenant or agreement in the
Subordinated Debt Securities or Subordinated Indenture. In the event of a
default in the payment of principal, premium, if any, or interest, if any, or in
the performance of any covenant or agreement in the Subordinated Debt Securities
or Subordinated Indenture, the Subordinated Trustee, subject to certain
limitations and conditions, may institute judicial proceedings to enforce
payment of such principal, premium, if any, or interest, if any, or to obtain
the performance of such covenant or agreement or any other proper remedy
(Section 503). Under certain circumstances, the Subordinated Trustee may
withhold notice to the Holders of the Subordinated Debt Securities of a default
if the Subordinated Trustee in good faith determines that the withholding of
such notice is in the best interest of such Holders, and the Subordinated
Trustee shall withhold such notice for certain defaults for a period of 30 days
(Section 602).
If a Bankruptcy Event of Default with respect to the Debt Securities of any
series at the time outstanding occurs and is continuing, either the Subordinated
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of that series may declare the principal amount (or,
if the Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof)
of all the Debt Securities of that series to be due and payable immediately. At
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any time after a declaration of acceleration with respect to Debt Securities of
any series has been made, but before a judgment or decree based on acceleration
has been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration (Section 502).
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the Stated Maturity of
a portion of the principal amount of such series of Original Issue Discount
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Subordinated Indenture provides that, subject to the duty of the
Subordinated Trustee during default to act with the required standard of care,
the Subordinated Trustee will be under no obligation to exercise any of its
rights or powers under the Subordinated Indenture at the request or direction of
any of the Holders, unless such Holders shall have offered to the Subordinated
Trustee reasonable security or indemnity (Section 603). Subject to such
provisions for the indemnification of the Subordinated Trustee and to certain
other conditions, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Subordinated Trustee, or exercising any trust or power conferred on the
Subordinated Trustee, with respect to the Debt Securities of that series,
provided that the Subordinated Trustee may decline to act if such direction is
contrary to law or the Subordinated Indenture, would unduly prejudice the right
of other Holders or would involve the Subordinated Trustee in personal liability
(Section 512).
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Subordinated Indenture, or for the
appointment of a receiver or trustee or for any remedy thereunder, unless such
Holder shall have previously given the Subordinated Trustee written notice of a
continuing Event of Default with respect to the Debt Securities of that series
and unless the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Subordinated Trustee to institute such
proceeding as trustee, and the Subordinated Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Debt Securities
of that series a direction inconsistent with such request and shall have failed
to institute such proceeding within 60 days (Section 507). However, the Holder
of any Debt Security will have an absolute right to receive payment of the
principal of (and premium, if any) and interest on such Debt Security on the due
dates expressed in such Debt Security and to institute suit for the enforcement
of any such payment (Section 508).
The Corporation is required to furnish to the Subordinated Trustee annually
a statement as to performance by the Corporation of certain of its obligations
under the Subordinated Indenture and as to any default in such performance
(Section 1006).
DEFEASANCE AND COVENANT DEFEASANCE
The Senior Indenture provides that, to the extent indicated in the
Applicable Prospectus Supplement, the Corporation, at the Corporation's option,
(a) will be discharged from any and all obligations in respect of the Senior
Debt Securities of a particular series (except for certain obligations to
register the transfer or exchange of Senior Debt Securities of such series, to
replace stolen, lost or mutilated Senior Debt Securities of such series, to
maintain paying agencies and to hold money for payment in trust) or (b) need not
comply with certain restrictive covenants of the Senior Indenture, including
those described under "Restrictions on Disposition of Voting Stock of Certain
Subsidiaries" and "Consolidation, Merger and Transfer of Assets" and the
occurrence of an event described in clause (d) under "Events of Default" under
the Senior Indenture shall no longer be an Event of Default with respect to such
series of Senior Debt Securities, in each case, if the Corporation deposits, in
trust, with the Senior Trustee money and/or Government Obligations, which
through the payment of interest thereon and principal thereof in accordance with
their terms will provide money in an amount sufficient, without reinvestment, to
pay all the principal of and any premium and interest on the Senior Debt
Securities of such series and any mandatory sinking fund payments or analogous
payments on the dates such payments are due in accordance with the terms of the
Senior Debt Securities of such series and the
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Senior Indenture. Such a trust may only be established if, among other things,
(i) no Event of Default or event which with the giving of notice or lapse of
time, or both, would become an Event of Default with respect to such series
under the Senior Indenture shall have occurred and be continuing on the date of
such deposit, (ii) such defeasance will not cause the Senior Trustee to have any
conflicting interest with respect to other securities of the Corporation and
(iii) the Corporation shall have delivered an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner, and at the same times as if such
defeasance had not occurred. In the event the Corporation exercises its option
to omit compliance with certain covenants of the Senior Indenture with respect
to the Senior Debt Securities of any series and the Senior Debt Securities of
such series are declared due and payable because of the occurrence of any Event
of Default under the Senior Indenture, the amount of money and Government
Obligations on deposit with the Trustee will be sufficient to pay amounts due on
the Senior Debt Securities of such series at the time of their Stated Maturity
but may not be sufficient to pay amounts due on the Senior Debt Securities of
such series at the time of the acceleration resulting from such Event of Default
under the Senior Indenture. However, the Corporation will remain liable with
respect to such payments (Article 13).
The foregoing defeasance and covenant defeasance provisions are not for the
benefit of the Subordinated Debt Securities.
MODIFICATION AND WAIVER
Modifications to and amendments of the Indentures may be made by the
Corporation and the Trustees with the consent of the Holders of 66 2/3% in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may without the consent of the Holder of each
Outstanding Debt Security affected thereby (a) change the stated maturity date
of the principal of, or any installment of principal or interest on, any Debt
Security, (b) reduce the principal amount of, or any premium or interest on, any
Debt Security, (c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the maturity thereof, (d) change the place
or currency of payment of principal of, or any premium or interest on, any Debt
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, or (f) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
whose Holders is required for modification or amendment of the Indentures or for
waiver of compliance with certain provisions of the Indentures or for waiver of
certain defaults (Section 902).
The Holders of at least 66 2/3% in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of all Holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Corporation with certain restrictive provisions of the
Indentures, including with respect to Senior Debt Securities those provisions
described above under "Restriction on Disposition of Voting Stock of Certain
Subsidiaries" (Senior Indenture Section 1007; Subordinated Indenture Section
1006). The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may, on behalf of all Holders of Debt
Securities of that series, waive any past default under the Applicable
Indenture, except a default in the payment of principal of, or any premium or
interest on, any Debt Security of that series or a default in respect of a
covenant or provision which under the Indentures cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of the
series affected (Section 513).
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
The Corporation may consolidate with or merge into, or transfer its assets
substantially as an entirety to, any corporation organized under the laws of the
United States, any state thereof or the District of Columbia, provided that the
successor corporation assumes the Corporation's obligations on the Debt
Securities and under the Indentures, that after giving effect to the transaction
no Event of Default, and no event which, after notice or lapse of time, would
become an Event of Default, shall have occurred and be continuing, and that
certain other conditions are met (Section 801).
16
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TRUSTEES
Either or both of the Trustees may resign or be removed with respect to one
or more series of Debt Securities and a successor Trustee may be appointed to
act with respect to such series (Section 610). In the event that two or more
persons are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a Trustee of a trust under the related
Indenture separate and apart from the trust administered by any other such
Trustee, and any action described herein to be taken by the "Trustee" may then
be taken by each such Trustee with respect to, and only with respect to, the one
or more series of Debt Securities for which it is Trustee (Section 611).
In the normal course of business, the Corporation and its subsidiaries
conduct banking transactions with the Trustees, and the Trustees conduct banking
transactions with the Corporation and its subsidiaries.
PLAN OF DISTRIBUTION
The Corporation may sell Debt Securities to or through underwriters to be
designated from time to time, and also may sell Debt Securities directly to
other purchasers or through agents. The distribution of the Debt Securities may
be effected from time to time in one or more transactions at a fixed price or
prices, which may be changed from time to time, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Each Prospectus Supplement will describe the method of
distribution of the Offered Debt Securities.
The Debt Securities will be new issues of securities with no established
trading market and unless otherwise specified in the applicable Prospectus
Supplement, the Corporation will not list any series of the Debt Securities on
any exchange. It has not presently been established whether the underwriters, if
any, of the Debt Securities will make a market in the Debt Securities. If a
market in the Debt Securities is made by any such underwriters, such market
making may be discontinued at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Debt Securities.
In connection with the sale of Debt Securities, underwriters or agents
acting on behalf of the Corporation may receive compensation from the
Corporation or from purchasers of Debt Securities for whom they may act as
agents in the form of discounts, concessions or commissions. Underwriters may
sell Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Corporation and any profit on the trade of
Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Corporation will be
described, in the Prospectus Supplement relating to such Debt Securities.
Under agreements which may be entered into by the Corporation,
underwriters, dealers, agents and their controlling persons who participate in
the distribution of Debt Securities may be entitled to indemnification by the
Corporation against certain liabilities, including liabilities under the
Securities Act, and to certain rights of contribution from the Corporation.
If so indicated in the Prospectus Supplement relating to any Offered Debt
Securities, the Corporation will authorize underwriters or other persons acting
as the Corporation's agents to solicit offers by certain institutions to
purchase any Offered Debt Securities from the Corporation pursuant to delayed
delivery contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Corporation. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of any Offered Debt Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and such other agents will not have any responsibility
in respect of the validity or performance of such contracts.
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<PAGE> 26
Underwriters or agents and their associates may be customers of (including
borrowers from), engage in transactions with, and/or perform services for, the
Corporation and its subsidiaries, the Senior Trustee and the Subordinated
Trustee, in the ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the Offered Debt Securities will be
passed upon for the Corporation by Raymond D. Fortin, Senior Vice
President -- Legal and Corporate Secretary, and by King & Spalding, Atlanta,
Georgia, and for any underwriters by Skadden, Arps, Slate, Meagher & Flom, New
York, New York. As of June 30, 1996, Mr. Fortin beneficially owned 18,000 shares
of the common stock of the Corporation. Skadden, Arps, Slate, Meagher & Flom
will rely upon the opinion of Mr. Fortin and of King & Spalding as to matters of
Georgia law.
EXPERTS
The audited consolidated financial statements incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
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No dealer, salesperson, or any other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus Supplement or the accompanying Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Corporation or any agent or the Underwriters. This
Prospectus Supplement and the accompanying Prospectus do not constitute an offer
of any securities other than those to which it relates or an offer to sell, or a
solicitation of an offer to buy, to any person in any jurisdiction where an
offer or solicitation would be unlawful. Neither the delivery of this Prospectus
Supplement or the accompanying Prospectus nor any sale made hereunder or
thereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Corporation since the date hereof.
---------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Corporation....................... S-2
Recent Developments................... S-2
Use of Proceeds....................... S-2
Selected Historical Financial Data.... S-3
Consolidated Ratio of Earnings to
Fixed Charges....................... S-4
Description of Senior Debentures...... S-4
Underwriting.......................... S-7
Legal Matters......................... S-8
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Corporation....................... 2
Use of Proceeds....................... 3
Consolidated Ratio of Earnings to
Fixed Charges....................... 3
Certain Regulatory Considerations..... 4
Description of the Debt Securities.... 7
Plan of Distribution.................. 17
Legal Matters......................... 18
Experts............................... 18
</TABLE>
======================================================
======================================================
$250,000,000
[SUNTRUST LOGO]
6% SENIOR DEBENTURES DUE
JANUARY 15, 2028
---------------------------
PROSPECTUS SUPPLEMENT
January 15, 1998
---------------------------
LEHMAN BROTHERS
CHASE SECURITIES INC.
SUNTRUST EQUITABLE SECURITIES CORPORATION
======================================================
