<PAGE> 1
FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 333-61583
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 13, 1998)
$300,000,000
SUNTRUST BANKS, INC.
7.75% SUBORDINATED NOTES DUE 2010
------------------
The Subordinated Notes will mature on May 1, 2010. Interest on the
Subordinated Notes is payable semiannually on May 1 and November 1 beginning
November 1, 2000. The Subordinated Notes rank equally with all of SunTrust
Banks, Inc.'s other unsecured subordinated indebtedness. The Subordinated Notes
may not be redeemed prior to maturity and will not be entitled to any sinking
fund.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public Offering Price 99.478% $298,434,000
Underwriting Discount .650% $ 1,950,000
Proceeds to SunTrust Banks, Inc. 98.828% $296,484,000
</TABLE>
Interest on the Subordinated Notes will accrue from April 28, 2000 to the
date of delivery.
------------------
The underwriters are offering the Subordinated Notes subject to various
conditions. The underwriters expect to deliver the Subordinated Notes to
purchasers on or about April 28, 2000.
------------------
SALOMON SMITH BARNEY
CHASE SECURITIES INC.
SUNTRUST EQUITABLE SECURITIES
April 26, 2000
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT
MAKING AN OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT PAGE OF
THIS PROSPECTUS SUPPLEMENT OR, WITH RESPECT TO INFORMATION INCORPORATED BY
REFERENCE, AS OF THE DATE OF SUCH INFORMATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Information About SunTrust Banks............................ S-2
Use of Proceeds............................................. S-3
Certain Regulatory Considerations........................... S-3
Consolidated Ratio of Earnings to Fixed Charges............. S-6
Description of the Subordinated Notes....................... S-6
Underwriting................................................ S-8
Legal Opinions.............................................. S-9
Experts..................................................... S-9
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
The Corporation............................................. 2
Recent Developments......................................... 3
Use of Proceeds............................................. 3
Consolidated Ratio of Earnings to Fixed Charges............. 4
Certain Regulatory Considerations........................... 5
Description of Debt Securities.............................. 7
Plan of Distribution........................................ 17
Legal Matters............................................... 18
Experts..................................................... 18
</TABLE>
INFORMATION ABOUT SUNTRUST BANKS
We are the ninth largest commercial banking organization in the United
States with assets of approximately $96.0 billion at March 31, 2000. We provide
a full line of consumer and commercial banking services to more than 3.7 million
customers through over 1,100 full-service banking offices in Alabama, Florida,
Georgia, Maryland, Tennessee, Virginia and the District of Columbia. Our primary
businesses include traditional deposit and credit services as well as trust and
investment services. We also provide, through various subsidiaries, credit
cards, mortgage banking, credit-related insurance, discount brokerage and
investment banking services. As of March 31, 2000, we had total deposits of
$66.3 billion, discretionary trust assets of $88.7 billion and a mortgage
servicing portfolio of $39.6 billion.
We are incorporated under the laws of the State of Georgia. Our executive
offices are located at 303 Peachtree Street, N.E., Atlanta, Georgia 30308. Our
general information telephone number is (404) 588-7711.
S-2
<PAGE> 3
USE OF PROCEEDS
We currently intend to use the net proceeds from the sale of the
Subordinated Notes for general corporate purposes. This means we may apply the
proceeds, among other things, to reduce our short-term indebtedness, including
commercial paper indebtedness, to repay our long-term indebtedness, or to
repurchase equity securities, which could include the repurchase of our own
common stock pursuant to our ongoing stock purchase program. We may also make
investments at the holding company level, invest in, or extend credit to, our
banking and other subsidiaries or other banks and companies engaged in other
financial service activities. We could also use the net proceeds for possible
acquisitions. Pending these uses, the net proceeds may be temporarily invested.
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 our company. Federal
and state regulation of financial institutions such as our company is intended
primarily for the protection of depositors and the Federal deposit insurance
funds rather than our shareholders or other creditors.
GENERAL
As a bank holding company, we are subject to the regulation and supervision
of the Board of Governors of the Federal Reserve System, which we refer to as
the Federal Reserve. As of December 31, 1999, we had 29 bank subsidiaries that
were subject to supervision and regulation by applicable state and federal
banking agencies, including the Federal Reserve, the Office of the Comptroller
of the Currency, which we refer to as the Comptroller, and the Federal Deposit
Insurance Corporation, which we refer to as the FDIC. Effective January 1, 2000,
27 of our bank subsidiaries merged into SunTrust Bank, Atlanta, which changed
its name to SunTrust Bank. SunTrust Bank, which we refer to as the Bank, is a
Georgia state bank which now has branches in Georgia, Florida, Tennessee,
Alabama, Maryland, Virginia and the District of Columbia.
The Bank is a member of the Federal Reserve System and is regulated by the
Federal Reserve and the Georgia Department of Banking and Finance. The Bank is
subject to various requirements and restrictions under federal and state law,
including requirements to maintain reserves against deposits, restrictions on
the types and amounts of loans that may be made and the interest that may be
charged thereon, and limitations on the types of investments that may be made
and the types of services that may be offered. Various consumer laws and
regulations also affect the operations of the Bank. In addition to the impact of
regulation, commercial banks are affected significantly by the actions of the
Federal Reserve as it attempts to control the money supply and credit
availability in order to influence the economy.
Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994, bank holding companies from any state may now acquire banks located in
any other state, subject to certain conditions, including concentration limits.
In addition, a bank may now establish branches across state lines by merging
with a bank in another state (unless applicable state law prohibits such
interstate mergers), provided certain conditions are met.
There are a number of obligations and restrictions imposed on bank holding
companies and their depository institution subsidiaries by federal law and
regulatory policy that are designed to reduce potential loss exposure to the
depositors of such depository institutions and to the FDIC insurance fund in the
event the depository institution becomes in danger of default or is in default.
For example, under a policy of the Federal Reserve with respect to bank holding
company operations, a bank holding company is required to serve as a source of
financial strength to its subsidiary depository institutions and commit
resources to support such institutions in circumstances where it might not do so
absent such policy. In addition, the "cross-guarantee" provisions of federal law
require depository institutions under common control to reimburse the FDIC for
any loss suffered or reasonably anticipated as a result of the default of a
commonly controlled insured depository
S-3
<PAGE> 4
institution or for any assistance provided by the FDIC to a commonly controlled
insured depository institution in danger of default. In the event of the
insolvency or receivership of the Bank, the claims of depositors and general
creditors of the Bank are entitled to a priority of payment over any of our
claims or claims of our creditors, including any claims based on any debt the
Bank owes to us.
Our nonbanking subsidiaries are regulated and supervised by various
regulatory bodies. For example, SunTrust Equitable Securities Corporation is a
broker-dealer and investment adviser registered with the SEC and a member of the
New York Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc., which we refer to as the NASD. SunTrust Securities, Inc. and
Crestar Securities Corporation are also broker-dealers registered with the SEC
and members of the NASD. Trusco Capital Management, Inc. and Crestar Asset
Management Company are investment advisers registered with the SEC. We also have
one limited purpose national bank subsidiary, SunTrust BankCard, N.A., which is
regulated by the Comptroller.
On November 12, 1999, financial modernization legislation known as the
Gramm-Leach-Bliley Act, which we refer to as the Act, was signed into law. Major
provisions of the Act became effective on March 11, 2000. The Act creates a new
type of financial services company called a financial holding company. A bank
holding company that elects to become a financial holding company may engage in
expanded securities activities and insurance sales and underwriting activities,
and may also acquire securities firms and insurance companies, subject in each
case to certain conditions. Securities firms and insurance companies may also
choose to establish or become financial holding companies and thereby acquire
banks, subject to certain conditions. We became a financial holding company
under the Act in March 2000. In order to maintain our status as a financial
holding company, we must maintain our capital levels, examination ratings, and
Community Reinvestment Act examination ratings at levels higher than those
required of a bank holding company that has not elected to become a financial
holding company. In addition to the Act, there have been a number of legislative
and regulatory proposals that would have an impact on the operation of
bank/financial holding companies and their bank and nonbank subsidiaries. It is
impossible to predict whether or in what form these proposals may be adopted in
the future and, if adopted, what their effect will be on us.
PAYMENT OF DIVIDENDS AND OTHER RESTRICTIONS
There are various legal and regulatory limits on the extent to which the
Bank may pay dividends or otherwise supply funds to us. In addition, federal and
state bank regulatory agencies also have the authority to prevent a bank or bank
holding company from paying a dividend or engaging in any other activity that,
in the opinion of the agency, would constitute an unsafe or unsound practice.
FDIC regulations require that management report annually on its responsibility
for preparing its institution's financial statements, and establishing and
maintaining an internal control structure and procedures for financial reporting
and compliance with designated laws and regulations concerning safety and
soundness.
The principal source of our cash revenues is dividends from our
subsidiaries, including the Bank. Federal and Georgia law limit the payment of
such dividends to a certain extent. The approval of the Federal Reserve Bank 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 or any national bank in
any calendar year exceeds the bank's net income for that year combined with its
retained net income for the preceding two 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 in excess of a bank's undivided profits. The relevant
federal and state bank regulatory agencies also have authority to prohibit a
bank holding company or a state or national bank from engaging in what, in the
opinion of such regulatory body, constitutes an unsafe or unsound practice in
conducting its business. Such regulatory agencies could deem the payment of
dividends, depending upon the financial condition of the subsidiary, to
constitute such an unsafe or unsound practice.
Under Georgia law (which would apply to any payment of dividends by the
Bank to us), the prior approval of the Georgia Department of Banking and Finance
is required before any cash dividends may be paid by a state bank if: (1) total
classified assets at the most recent examination of such bank exceed 80% of the
Tier 1 capital plus the allowance for loan losses of such bank; (2) the
aggregate amount of dividends declared or anticipated to be declared in the
calendar year exceeds 50% of the net profits, after taxes but
S-4
<PAGE> 5
before dividends, for the previous calendar year; or (3) the ratio of Tier 1
capital to adjusted total assets is less than 6%.
Retained earnings of our banking subsidiaries available for payment of cash
dividends under all applicable regulations without obtaining governmental
approval were approximately $634.2 million as of March 31, 2000.
In addition, the Bank is subject to limitations under Section 23A and 23B
of the Federal Reserve Act with respect to extensions of credit to, investments
in, and certain other transactions with us and our 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 Reserve has adopted minimum risk-based and leverage capital
guidelines for bank holding companies. 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 December 31, 1999, our total risk-based
capital ratio was 11.31%, including 7.48% of Tier 1 capital. The minimum
required leverage capital ratio (Tier 1 capital to average total assets) is 3%
for bank holding companies that meet certain specified criteria, including that
they have the highest regulatory rating. As of December 31, 1999, our leverage
capital ratio was 7.17%. Higher risk-based and leverage ratios may apply under
certain circumstances.
The Bank is subject to similar risk-based and leverage capital requirements
adopted by the federal banking agencies.
Failure to meet capital requirements can subject a bank 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.
The federal banking agencies have broad powers under current federal law to
take prompt corrective action to resolve problems of insured depository
institutions. The extent of these powers depends on whether the institutions in
question are "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized," as these
terms are defined under regulations issued by each of the federal banking
agencies. 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.
An undercapitalized depository institution is subject to restrictions in a
number of areas, including asset growth, acquisitions, branching, new lines of
business and borrowing from the Federal Reserve. 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 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
S-5
<PAGE> 6
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.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of our company. 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. For 1999, the consolidated ratio of
earnings to fixed charges has been computed excluding extraordinary gains. 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>
THREE
MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
----------- --------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Including interest on deposits....................... 1.59 1.64 1.60 1.54 1.60 1.58 1.59
Excluding interest on deposits....................... 2.76 2.52 2.39 2.33 2.76 3.11 3.13
</TABLE>
DESCRIPTION OF THE SUBORDINATED NOTES
The following description of the Subordinated Notes supplements, and to the
extent inconsistent therewith replaces, the description of the general terms and
provisions of the subordinated 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 Subordinated Notes will be our general unsecured obligations issued in
an initial aggregate principal amount of $300,000,000. We may issue additional
Subordinated Notes from this series in the future without the approval of the
holders of the $300,000,000 of Subordinated Notes offered hereby. We will issue
the Subordinated Notes under an Indenture (the "Subordinated Indenture") dated
as of May 1, 1993, between us and Bank One Trust Company, N.A. (as successor in
interest to The First National Bank of Chicago), as Trustee. The Subordinated
Notes, together with any Subordinated Notes that may be issued in the future,
constitute a single series of Subordinated Debt Securities under the
Subordinated Indenture.
The Subordinated Notes will mature on May 1, 2010, are not redeemable prior
to their stated maturity, and will not be entitled to any sinking fund.
The Subordinated Notes will bear interest at the rate of 7.75% per annum
from April 28, 2000, or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semiannually on May 1 and
November 1 of each year, commencing November 1, 2000, to the persons in whose
names the Subordinated Notes are registered at the close of business on the
April 15 or October 15, as the case may be, next preceding such May 1 and
November 1. Interest on the Subordinated Notes will be calculated based on a
360-day year consisting of twelve 30-day months.
Payment of the principal of the Subordinated Notes may be accelerated only
in the case of the bankruptcy of SunTrust Banks, Inc. Holders of the
Subordinated Notes have no right of acceleration if we default in the payment of
principal or interest on the Subordinated Notes or if we fail to perform any
covenant or agreement with respect to the Subordinated Notes. See "Description
of the Debt Securities -- Events of Default -- The Subordinated Indenture" in
the accompanying prospectus.
The Subordinated Notes are not deposits and are not insured by the FDIC or
any governmental agency.
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<PAGE> 7
SUBORDINATION
The Subordinated Notes are our direct, unsecured obligations and will be
subordinate to all our Senior Indebtedness and, under certain circumstances
relating to our dissolution, winding-up, liquidation or reorganization, to all
our Additional Senior Obligations, as described in the accompanying prospectus
under the heading "Description of the Debt Securities -- Subordination of the
Subordinated Debt Securities." As of March 31, 2000, we had an aggregate of
approximately $5,233.2 million of long-term Senior Indebtedness outstanding and
an aggregate of approximately $720.2 million of short-term Senior Indebtedness
outstanding, which consisted primarily of commercial paper. As of March 31,
2000, we had no Additional Senior Obligations outstanding. We expect from time
to time to incur additional indebtedness constituting Senior Indebtedness and
Additional Senior Obligations. The Subordinated Indenture does not limit or
prohibit the incurrence of Senior Indebtedness or Additional Senior Obligations.
DELIVERY AND FORM
The Subordinated Notes initially will be represented by one or more Global
Securities deposited with DTC and registered in the name of Cede & Co. (DTC's
nominee). The term "Depositary" refers to DTC or any successor depositary.
Except as set forth below, the Subordinated Notes will be available for purchase
in denominations of $1,000 and integral multiples thereof in book-entry form
only. Unless and until certificated Subordinated Notes are issued under the
limited circumstances described under "Description of the Debt
Securities -- Book-Entry Securities" in the accompanying prospectus, no
beneficial owner of a Subordinated Note will be entitled to receive a definitive
certificate representing a Subordinated Note, and no such beneficial owner will
be considered the owner or holder of the Subordinated Notes under the
Subordinated Indenture. So long as the Depositary is the registered owner of the
Global Securities, the Depositary, or its nominee, as the case may be, will be
considered to be the sole owner of holder of the Subordinated Notes for all
purposes of the Subordinated Indenture.
DTC has advised us 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, you should read
"Description of the Debt Securities -- Book-Entry Securities" in the
accompanying prospectus.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Subordinated Notes will be made by the underwriters in
immediately available funds. We will make all payments of principal and interest
in immediately available funds or the equivalent. The Subordinated Notes will
trade in DTC's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the Subordinated Notes will therefore be required by
DTC to settle in immediately available funds. We cannot assure you as to the
effect, if any, of settlement in immediately available funds on trading activity
in the Subordinated Notes.
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<PAGE> 8
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated April 25, 2000, we have agreed to sell to Salomon Smith Barney Inc., Chase
Securities Inc. and SunTrust Equitable Securities Corporation (collectively, the
"underwriters"), and the underwriters have agreed to purchase, the respective
principal amount of Subordinated Notes set forth after their names below at the
price to the public less the underwriting discount set forth on the cover page
of this prospectus supplement.
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
----------- ----------------
<S> <C>
Salomon Smith Barney Inc.................................... $225,000,000
Chase Securities Inc........................................ $ 37,500,000
SunTrust Equitable Securities Corporation................... $ 37,500,000
------------
Total............................................. $300,000,000
============
</TABLE>
The following table shows the underwriting discounts to be paid to the
underwriters by SunTrust Banks in connection with this offering.
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- -----
<S> <C> <C>
Underwriting Discount........................... 0.650% $1,950,000
</TABLE>
In addition to the underwriting discount above, we estimate that we will
spend approximately $75,000 for expenses in connection with this offering. In
addition, the underwriters have agreed to reimburse a portion of the costs and
expenses of this offering to us.
In the Underwriting Agreement, the underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Subordinated Notes
if any Subordinated Notes are purchased. We have been advised by the
underwriters that the underwriters propose initially to offer the Subordinated
Notes to the public at the public offering price set forth on the cover page of
this prospectus supplement and to certain dealers at such price less a
concession not in excess of $4.00 per $1,000 principal amount of the
Subordinated Notes. The underwriters may allow and such dealers may reallow a
concession not in excess of $2.50 per $1,000 principal amount of the
Subordinated Notes. After the initial public offering, the public offering price
and such concessions may be changed.
The Underwriting Agreement provides that we will indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act of
1933, as amended, or contribute to any payments the underwriters may be required
to make in respect thereof.
In connection with the offering, Salomon Smith Barney Inc., on behalf of
the underwriters, may purchase and sell Subordinated Notes in the open market.
These transactions may include over-allotment, syndicate covering transactions
and stabilizing transactions. Over-allotment involves syndicate sales of
Subordinated Notes in excess of the principal amount of Subordinated Notes to be
purchased by the underwriters in the offering, which creates a syndicate short
position. Syndicate covering transactions involve purchases of the Subordinated
Notes in the open market after the distribution has been completed in order to
cover syndicate short positions. Stabilizing transactions consist of certain
bids or purchases of Subordinated Notes made for the purpose of preventing or
retarding a decline in the market price of the Subordinated Notes while the
offering is in progress.
The underwriters may also impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney Inc., in covering syndicate short positions or making
stabilizing purchases, repurchases Subordinated Notes originally sold by that
syndicate member.
Any of these activities may cause the price of the Subordinated Notes to be
higher than the price that otherwise would exist in the open market in the
absence of such transactions. These transactions may be effected in the
over-the-counter market or otherwise and, if commenced, may be discontinued at
any time.
The underwriters and their respective associates and affiliates may be
customers of, engage in transactions with, and perform investment banking and
other financial services (including commercial lending) for, our
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<PAGE> 9
company in the ordinary course of business. SunTrust Equitable Securities, one
of the underwriters, is an indirect, wholly owned subsidiary of SunTrust Banks.
Under Conduct Rule 2720, which we refer to as CR-2720 of the NASD, when an NASD
member, such as SunTrust Equitable Securities, participates in the distribution
of an affiliated company's securities, the offering must be conducted in
accordance with applicable provisions of CR 2720. SunTrust Banks is considered
to be an "affiliate", as such term is defined in CR 2720, of SunTrust Equitable
Securities. The offer and sale of the Subordinated Notes by SunTrust Equitable
Securities will comply with the applicable requirements of CR 2720 regarding the
underwriting of securities of affiliates.
The Subordinated Notes are new securities with no established trading
market and there can be no assurance as to the liquidity of any markets that may
develop for the Subordinated Notes, the ability of the holders of the
Subordinated Notes to sell their Subordinated Notes or at what price holders of
the Subordinated Notes will be able to sell their Subordinated Notes. Future
trading prices of the Subordinated Notes will depend on many factors, including,
among other things, prevailing interest rates, SunTrust Bank's operating
results, and the market for similar securities. SunTrust Banks has been advised
by Salomon Smith Barney Inc. that it initially intends to make a market in the
Subordinated Notes, but Salomon Smith Barney Inc. is not obligated to do so and
may discontinue any market making at any time without notice.
LEGAL OPINIONS
The validity of the Subordinated Notes will be passed upon for us 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
SunTrust Banks. As of March 31, 2000, Mr. Fortin was the record and beneficial
owner of 7,500 shares of our common stock and held options to purchase 6,000
shares of our common stock. Mr. Fortin will rely upon the opinion of King &
Spalding as to matters of New York law. The validity of the Subordinated Notes
will be passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom
LLP New York, New York.
EXPERTS
Our audited consolidated financial statements incorporated by reference in
this prospectus supplement, the accompanying prospectus and the related
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said report.
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<PAGE> 10
Prospectus
$600,000,000
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 $600,000,000 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. Unless specifically stated in a Prospectus Supplement, 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 OR INSTRUMENTALITY.
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 NOVEMBER 13, 1998.
<PAGE> 11
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). Information regarding the operation of the public reference
facilities of the Commission may be obtained by calling the Commission at
1-800-SEC-0330. The Commission also maintains a Web site at http://www.sec.gov
that 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 Statement on Form S-3 of which this Prospectus is a
part (together with all exhibits and amendments, the "Registration Statement"),
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, 1997, as amended
on November 13, 1998, (b) its Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998, as amended on November 13, 1998, June 30, 1998, as amended
on November 13, 1998, and September 30, 1998, and(c) its Current Reports on Form
8-K dated January 16, 1998, March 10, 1998, July 20, 1998, August 12, 1998 and
November 13, 1998.
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 this Prospectus or any accompanying Prospectus Supplement
or in a document incorporated or deemed to be incorporated by reference herein
or therein shall be deemed to be modified or superseded for purposes of this
Prospectus or such accompanying Prospectus Supplement to the extent that a
statement contained herein or therein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or
therein 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 the Registration Statement or 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 with three principal
subsidiaries: 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
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<PAGE> 12
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 securities.
Under the longstanding policy of the Board of Governors of the Federal
Reserve System (the "Federal Reserve"), a bank holding company is expected to
act as a source of financial strength for its subsidiary banks and to commit
resources to support such banks. As a result of this policy, the Corporation may
be required to commit resources to the Subsidiary Banks in circumstances where
it might not otherwise do so.
Because the Corporation is a bank holding company, its rights and the
rights of its creditors, including the holders of the Offered Debt Securities
(as defined herein), to participate in the distribution and payment of assets of
any subsidiary upon the subsidiary's liquidation or recapitalization would be
subject to the prior claims of such subsidiary's creditors except to the extent
that the Corporation may itself be a creditor with recognized claims against the
subsidiary.
The Corporation's principal executive offices are located at 303 Peachtree
Street, N.E., Atlanta, Georgia 30308, and its telephone number is 404-588-7711.
RECENT DEVELOPMENTS
In connection with the review by the Staff of the Securities and Exchange
Commission of documents relating to the Corporation's proposed acquisition of
Crestar Financial Corporation ("Crestar"), and the Staff's comments thereon, the
Corporation has lowered its provision for loan losses in 1996, 1995 and 1994 by
$40 million, $35 million and $25 million, respectively. The effect of this
action was to increase the Corporation's net income in those years by $24.4
million, $21.4 million and $15.3 million, respectively. Further, as of December
31, 1997 and 1996, the reserve for loan losses has been decreased by a total of
$100 million and shareholders' equity has been increased by a total of $61
million. All amounts included or incorporated by reference herein have been
restated to give effect to the above adjustments. The Corporation has amended
certain of its reports filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, to reflect, among
other things, the adjustments to its historical financial statements resulting
from the foregoing. See "Available Information". All historical financial
information for the Corporation and all pro forma financial information for the
Corporation and Crestar combined included or incorporated by reference herein
have been adjusted to reflect the adjustments to the Corporation's loan loss
provision discussed above.
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
refinancing of debt, including outstanding commercial paper and other short-term
indebtedness, redemption or repurchase of shares of its outstanding common and
preferred stock, 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.
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<PAGE> 13
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 (i) net income plus all applicable income taxes
plus fixed charges by (ii) 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>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- --------------------------------
1998 1997 1997 1996 1995 1994 1993
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Including interest on deposits................. 1.57x 1.58x 1.58x 1.64x 1.63x 1.85x 1.87x
Excluding interest on deposits................. 2.38x 2.74x 2.65x 3.40x 3.30x 4.34x 5.07x
</TABLE>
4
<PAGE> 14
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. The Corporation's Subsidiary Banks are
subject to regulation, supervision and examination by applicable state and
federal banking agencies, including the Federal Reserve, 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 certain 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. 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 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 approval of the Federal Reserve 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 or any national bank in any calendar year
exceeds the bank's net income for that year combined with its retained net
income for the preceding two 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 undivided profits, and a dividend
may not be paid in excess of a bank's undivided profits. The relevant federal
and state regulatory agencies also have authority to prohibit a bank holding
company, which would include STB of Florida, STB of Georgia and STB of
Tennessee, or a state or national bank 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.
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 Department of
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<PAGE> 15
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,
after taxes but before dividends, 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 $540.1 million as of December 31, 1997.
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 Reserve has adopted minimum risk-based and leverage capital
guidelines for bank holding companies. 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 September 30, 1998, the Corporation's
total risk-based capital ratio was 12.83%, including 7.49% of Tier 1 capital.
The minimum required leverage capital ratio (Tier 1 capital to average total
assets) is 3% for bank holding companies that meet certain specified criteria,
including that they have the highest regulatory rating. As of September 30,
1998, the Corporation's leverage capital ratio was 7.10%. Higher risk-based and
leverage ratios may apply under certain circumstances.
The Subsidiary Banks are subject to similar risk-based and leverage capital
requirements adopted by the federal banking agencies.
Failure to meet capital requirements can subject a bank 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.
An undercapitalized depository institution is subject to restrictions in a
number of areas, including asset growth, acquisitions, branching, new lines of
business, and borrowing from the Federal Reserve. 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 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
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<PAGE> 16
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 policy, the Corporation is expected to serve 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 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.
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
Statement 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.
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<PAGE> 17
The Debt Securities will be limited to an aggregate initial offering price
of $400,000,000 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 any bank or nonbank subsidiary of the
Corporation and will not be insured by the FDIC, the Bank Insurance Fund or any
other government agency or instrumentality. 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 September 30, 1998, the Corporation had an aggregate of $2,597.9 million
of long-term Senior Indebtedness (as defined below under "Subordination of the
Subordinated Debt Securities") outstanding and an aggregate of approximately
$1,134.2 million of short-term Senior Indebtedness outstanding which consisted
primarily of commercial paper. As of September 30, 1998, 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 September 30, 1998, the Corporation had an aggregate of
$1,800.0 million of long-term Subordinated Debt Securities outstanding.
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 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
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<PAGE> 18
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 depositary
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 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.
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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
September 30, 1998, the Corporation's Net Worth was approximately $5.3 billion.
As of September 30, 1998, 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 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.
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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 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
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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 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.
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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 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 September 30, 1998, 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
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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).
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
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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
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
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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 1005).
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 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 rate of 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
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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).
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
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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.
The participation of any affiliate of the Corporation in the offer and sale
of Offered Debt Securities will be made pursuant to and will conform with the
provisions of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc.
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, and for any
underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York. As
of September 30, 1998, Mr. Fortin beneficially owned 23,000 shares of common
stock of the Corporation and held options to purchase 4,800 shares of common
stock of the Corporation. Skadden, Arps, Slate, Meagher & Flom LLP will rely
upon the opinion of Mr. Fortin and of King & Spalding as to matters of Georgia
law.
EXPERTS
The audited consolidated financial statements of the Corporation
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
incorporated herein in reliance upon the authority of said firm as experts in
giving said report.
The consolidated financial statements of Crestar Financial Corporation and
Subsidiaries as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, have been incorporated by reference
herein and in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing. The report of KPMG Peat Marwick LLP refers to their reliance on
another auditors' report with respect to amounts related to Citizens Bancorp for
1996 and 1995 included in the aforementioned consolidated financial statements.
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS. YOU MUST NOT RELY ON ANY UNAUTHORIZED
INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IS AN OFFER TO SELL ONLY THE SUBORDINATED NOTES OFFERED HEREBY, BUT
ONLY UNDER CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Information About SunTrust Banks...... S-2
Use of Proceeds....................... S-3
Certain Regulatory Considerations..... S-3
Consolidated Ratio of Earnings to
Fixed Charges....................... S-6
Description of the Subordinated
Notes............................... S-6
Underwriting.......................... S-8
Legal Opinions........................ S-9
Experts............................... S-9
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Corporation....................... 2
Recent Developments................... 3
Use of Proceeds....................... 3
Consolidated Ratio of Earnings to
Fixed Charges....................... 4
Certain Regulatory Considerations..... 5
Description of Debt Securities........ 7
Plan of Distribution.................. 17
Legal Matters......................... 18
Experts............................... 18
</TABLE>
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$300,000,000
SUNTRUST BANKS, INC.
7.75% SUBORDINATED NOTES DUE 2010
------------------
PROSPECTUS SUPPLEMENT
APRIL 26, 2000
(INCLUDING PROSPECTUS DATED
NOVEMBER 13, 1998)
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SALOMON SMITH BARNEY
CHASE SECURITIES INC.
SUNTRUST EQUITABLE
SECURITIES
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