<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 14, 1994
$100,000,000
N_O_R_D_S_T_R_O_M C_R_E_D_I_T, I_N_C.
MEDIUM-TERM NOTES, SERIES C
DUE FROM 9 MONTHS TO 25 YEARS FROM DATE OF ISSUE
--------------
Nordstrom Credit, Inc. may offer from time to time up to $100,000,000
aggregate principal amount of its Medium-Term Notes, Series C due from 9 months
to 25 years from the date of issue. The specific interest rates and range of
maturities will be set forth in Pricing Supplements to this Prospectus
Supplement. Unless otherwise specified in an applicable Pricing Supplement,
interest on the Notes will be payable each May 15 and November 15 and at
maturity. Notes will be issued only in registered form in denominations of
$100,000 and in any greater amount that is an integral multiple of $50,000. See
"Description of Notes."
The Notes will be represented by one or more global securities registered in
the name of a nominee of The Depository Trust Company, as Depositary. Beneficial
interests in the Notes will be shown on, and transfers thereof will be effected
only through, records maintained by the Depositary and its Participants. Except
as described in "Description of Notes -- Book-Entry System," owners of
beneficial interests in the global securities will not be entitled to receive
Notes in definitive form and will not be considered the Holders thereof.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
<TABLE>
<CAPTION>
PRICE TO
PUBLIC(1) AGENTS' COMMISSIONS(2) PROCEEDS TO COMPANY(2)(3)
---------------- ------------------------ -----------------------------
<S> <C> <C> <C>
Per Note............................... 100% .125%-.750% 99.875%-99.250%
Total.................................. $100,000,000 $125,000-$750,000 $99,875,000-$99,250,000
<FN>
- --------------
(1) Unless otherwise specified in an applicable Pricing Supplement, the Notes
will be issued at 100% of their principal amount.
(2) The Company will pay the Agents a commission of from .125% to .750%,
depending on maturity, of the principal amount of any Note sold through
them as agents (or sold to such Agents as principal in circumstances in
which no other discount is agreed). The Company has agreed to indemnify the
Agents against certain liabilities, including liabilities under the
Securities Act of 1933. See "Supplemental Plan of Distribution."
(3) Before deducting estimated expenses of $150,000 payable by the Company.
</TABLE>
--------------
Offers to purchase Notes are being solicited, on a reasonable efforts basis,
from time to time by the Agents on behalf of the Company. Notes may be sold to
the Agents on their own behalf at negotiated discounts. The Company reserves the
right to sell the Notes directly on its own behalf. The Company also reserves
the right to withdraw, cancel or modify the offering contemplated hereby without
notice. The Company or the Agents may reject any order as a whole or in part.
See "Supplemental Plan of Distribution."
GOLDMAN, SACHS & CO. CS FIRST BOSTON
---------
The date of this Prospectus Supplement is November 22, 1994.
<PAGE>
SELECTED FINANCIAL DATA OF THE COMPANY
The following table summarizes selected financial data of Nordstrom Credit,
Inc. (the "Company") and is qualified in its entirety by reference to the
detailed information and financial statements included in the documents
incorporated in the Prospectus by reference.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
OCTOBER 31,
YEAR ENDED JANUARY 31, (UNAUDITED)
----------------------------------------------------- --------------------
1990 1991 1992 1993 1994 1993 1994
--------- --------- --------- --------- --------- --------- ---------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS STATEMENT DATA:
Service charge income on
investment in customer accounts
receivable, and other............ $ 71,996 $ 81,903 $ 89,067 $ 93,597 $ 92,070 $ 68,549 $ 68,247
Expenses:
Interest, net................... 33,626 36,639 34,775 33,593 29,465 21,996 21,933
Service fees paid to Nordstrom
National Credit Bank........... -- -- 12,747 28,848 28,551 20,673 19,184
General and administrative...... 25,134 28,875 17,522 1,835 1,682 1,217 1,528
--------- --------- --------- --------- --------- --------- ---------
Total expenses.............. 58,760 65,514 65,044 64,276 59,698 43,886 42,645
--------- --------- --------- --------- --------- --------- ---------
Earnings before income taxes...... 13,236 16,389 24,023 29,321 32,372 24,663 25,602
Income taxes...................... 5,100 6,200 9,200 10,400 11,700 8,880 9,300
--------- --------- --------- --------- --------- --------- ---------
Net earnings...................... $ 8,136 $ 10,189 $ 14,823 $ 18,921 $ 20,672 $ 15,783 $ 16,302
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Ratio of earnings to fixed
charges (1)...................... 1.39x 1.45x 1.69x 1.87x 2.09x 2.12x 2.16x
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
BALANCE SHEET DATA (AT PERIOD END):
Liabilities:
Short-term debt
Notes payable to banks (2).... $ 50,000 $ 50,000 $ 50,000 $ 25,000 $ 25,000 $ 25,000 $ 50,000
Note payable to Nordstrom,
Inc. (3)..................... -- -- 22,350 112,500 112,500 13,800 15,000
Commercial paper (4).......... 52,573 80,054 84,735 13,319 15,337 54,177 121,393
Accrued interest, wages and
other.......................... 11,471 10,833 10,054 9,969 9,665 10,821 12,186
Long-term debt (5).............. 298,500 278,000 325,000 305,600 265,600 280,600 212,100
--------- --------- --------- --------- --------- --------- ---------
Total liabilities........... 412,544 418,887 492,139 466,388 428,102 384,398 410,679
Investment of Nordstrom, Inc. .... 85,065 95,312 110,135 129,056 149,728 144,839 166,030
--------- --------- --------- --------- --------- --------- ---------
Total liabilities and
investment of Nordstrom,
Inc. ...................... $ 497,609 $ 514,199 $ 602,274 $ 595,444 $ 577,830 $ 529,237 $ 576,709
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
<FN>
- ------------------
(1) For the purpose of this ratio, earnings consist of earnings before income
taxes plus fixed charges. Fixed charges consist of interest expense.
(2) The notes payable to banks represent borrowings from commercial banks. At
October 31, 1994, outstanding borrowings are from one commercial bank, and
bear interest at floating rates based on published discount rates (5.0% at
October 31, 1994) and mature up to six months from the date of borrowing or
on demand.
(3) The note payable to Nordstrom, Inc. ("Nordstrom") bears interest at
floating rates based on published discount rates (5.0% at October 31, 1994)
and matures up to six months from the date of borrowing or on demand.
(4) Commercial paper outstanding at October 31, 1994 matures in 1 to 90 days
from date of issue at interest rates ranging from 4.7% to 5.45%. The
Company has a $90,000,000 unsecured line of credit with a group of
commercial banks with First Interstate Bank of Denver, N.A., as agent,
which expires on June 23, 1995, and a $60,000,000 unsecured line of credit
with Bank of America National Trust and Savings Association which expires
on June 30, 1995. Under the terms of these lines of credit, the Company
must, among other things, comply with the terms of the Investment Agreement
and Operating Agreement and maintain a ratio of total debt to tangible net
worth at the end of each quarter of no greater than 5 to 1 for purposes of
the $90,000,000 agreement and no greater than 6 to 1 for purposes of the
$60,000,000 agreement. These lines of credit serve as liquidity support for
the Company's short-term debt.
(5) Long-term debt as of October 31, 1994 consists of unsecured notes and
debentures maturing between 1994 and 2016, bearing rates of interest
between 8.05% and 9.6% per annum.
</TABLE>
S-2
<PAGE>
RECENT DEVELOPMENTS
Nordstrom National Credit Bank (the "Bank") issues Nordstrom credit cards
for use in Nordstrom stores and, pursuant to the Operating Agreement, sells the
Accounts generated thereby to the Company. In May 1994, the Bank began to issue
Visa cards in addition to the Nordstrom credit cards. Visa Accounts generated
through the use of the Visa cards are purchased by the Company pursuant to the
Visa Operating Agreement. At October 31, 1994, there were approximately 30,000
Visa card holders. The Company bears the risk of credit loss on Visa Accounts
which do not arise from purchases at Nordstrom.
SELECTED CONSOLIDATED FINANCIAL DATA OF NORDSTROM
The Company's results of operations and financial condition are primarily
dependent upon the amount of accounts receivable generated through sales in
Nordstrom stores. Commencing in May 1994, the Company also finances accounts
receivable generated through purchases utilizing the Nordstrom National Credit
Bank Visa card in Nordstrom stores and elsewhere. The following table provides
certain consolidated information with respect to Nordstrom for the periods
indicated.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
OCTOBER 31,
YEAR ENDED JANUARY 31, (UNAUDITED)
---------------------------------------------------------- ----------------------
1990 1991 1992 1993 1994 1993 1994
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SQUARE FOOT AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS STATEMENT DATA:
Net sales......................... $2,671,114 $2,893,904 $3,179,820 $3,421,979 $3,589,938 $2,482,514 $2,703,531
Net earnings...................... 114,909 115,816 135,815 136,619 140,418 79,402 133,075
BALANCE SHEET DATA (AT PERIOD END):
Long-term obligations, including
current portion.................. $ 468,412 $ 489,172 $ 511,000 $ 481,945 $ 438,574 $ 453,781 $ 334,139
Shareholders' equity.............. 733,250 826,410 939,231 1,052,031 1,166,504 1,111,307 1,280,215
OTHER DATA:
Percentage of net sales resulting
in Accounts...................... 57.20% 53.97% 51.86% 48.78% 45.86% 46.43% 43.62%
Customer accounts receivable, net
of allowance for doubtful
accounts at period end (1)....... $ 519,656 $ 558,573 $ 585,490 $ 584,379 $ 565,151 $ 517,635 $ 562,289
Net write-offs as a percentage of
average customer accounts
receivable (1)(2)................ 2.98% 3.42% 5.09% 5.26% 4.77% 4.45% 3.46%
Ratio of earnings to fixed charges
(3).............................. 3.60x 3.35x 3.98x 4.41x 4.95x 3.97x 6.04x
Number of stores (at period
end)............................. 59 63 68 72 74 74 76
Total square footage (at period
end)............................. 6,898,000 7,655,000 8,590,000 9,224,000 9,282,000 9,280,000 9,995,000
Net sales per square foot......... $ 398 $ 391 $ 388 $ 381 $ 383 $ 354 $ 373
<FN>
- ------------------
(1) Customer accounts receivable at October 31, 1994, includes net Nordstrom
National Credit Bank Visa card receivables of $38,219,000.
(2) These percentages were derived by dividing net write-offs of customer
accounts receivable (gross write-offs less recoveries) by the average of
the sum of customer accounts (less allowances for doubtful accounts) at the
beginning of the period and at the end of each quarter during the period.
(3) For the purpose of this ratio, earnings consist of earnings before income
taxes plus fixed charges less capitalized interest. Fixed charges consist
of interest expense, capitalized interest and the estimated interest
portion of rent expense.
</TABLE>
S-3
<PAGE>
DESCRIPTION OF NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE MEDIUM-TERM NOTES,
SERIES C (THE "NOTES") OFFERED HEREBY SUPPLEMENTS AND, TO THE EXTENT
INCONSISTENT THEREWITH, REPLACES THE DESCRIPTION OF THE GENERAL TERMS AND
PROVISIONS OF DEBT SECURITIES SET FORTH IN THE PROSPECTUS, TO WHICH DESCRIPTION
REFERENCE IS HEREBY MADE.
GENERAL
The Notes will be unsecured obligations of the Company, will be offered on a
continuous basis and will mature on any business day from nine months to 25
years from their date of issue, as selected by the initial purchaser and agreed
to by the Company. Notes are issuable only in fully registered form in
denominations of $100,000 or any amount in excess thereof which is an integral
multiple of $50,000.
Each Note will bear interest from its date of issue at the annual rate
stated on the face thereof, and, unless otherwise specified in an applicable
Pricing Supplement, interest will be payable semiannually on May 15 and November
15 of each year and at maturity. Interest will be computed on the basis of a
360-day year of twelve 30-day months. Interest will be payable generally to the
person in whose name a Note is registered at the close of business on the May 1
or November 1 record date next preceding the May 15 or November 15 interest
payment date, provided, however, that interest payable on a maturity date which
is not a May 15 or November 15 will be payable to the person to whom principal
is payable. In the case of a Note issued between a record date and the interest
payment date relating to such record date (a "Long Period Note"), the first
payment of interest on such Note shall be made on the interest payment date
following the next succeeding record date to the registered owner on such next
succeeding record date.
Payments of principal and interest at maturity will be made in immediately
available funds against presentation and surrender of the Note. The Depositary
(as defined below) shall be entitled to receive payments of interest by wire
transfer of immediately available funds.
Interest rates on the Notes are subject to change by the Company from time
to time, but no such change will affect any Notes theretofore issued or as to
which an offer has been accepted by the Company. In the case where any interest
payment date or stated maturity date of any Note shall not be a business day,
then payment of interest or principal need not be made on such day but may be
made on the next succeeding business day with the same force and effect as if
made on such interest payment date or stated maturity date, and no interest
shall accrue with respect to such payment for the period from and after such
interest payment date or stated maturity date, as the case may be. The Notes
will not be redeemable prior to maturity.
The Notes offered hereby constitute part of a single series for purposes of
the Indenture under which the Notes will be issued, which series is limited
initially to $150,000,000 in aggregate principal amount (which limit may be
increased by action of the Board of Directors of the Company and such action may
change other terms of additional securities of the series). The Notes will rank
equally with all securities previously issued under the Indenture and all other
unsecured and unsubordinated indebtedness of the Company. For a description of
the rights of the holders of securities under the Indenture, including the
Notes, see "Description of Debt Securities" in the Prospectus attached hereto.
BOOK-ENTRY SYSTEM
Upon issuance, all Notes having the same original issuance date, interest
rate and stated maturity will be represented by a single global security (a
"Global Note"). Each Global Note representing one or more Notes will be
deposited with, or on behalf of, The Depository Trust Company, New York, New
York (the "Depositary") and registered in the name of the Depositary's nominee.
Except as set forth below, Global Notes may be transferred, in whole and not in
part, only to the Depositary or another nominee of the Depositary or to a
successor depositary or nominee of such successor.
The Depositary has advised as follows: It is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a
S-4
<PAGE>
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. "Direct Participants" include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations. The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the the Depositary's system is also available to others such as securities
brokers and dealers, banks, and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The Rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange Commission.
Purchases of interests in the Global Note under the the Depositary's system
must be made by or through Direct Participants, which will receive a credit for
such interests on the Depositary's records. The ownership interest of each
actual purchaser of interests in the Global Note ("Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from the Depositary of their
purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the
Global Note are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Global Note, except
as described below.
To facilitate subsequent transfers, all Global Note deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Global Securities with the
Depositary and their registration in the name of Cede & Co. effect no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the interests in the Global Note; the Depositary's records reflect
only the identity of the Direct Participants to whose accounts interests in the
Global Securities are credited, which may or may not be the Beneficial Owners.
The Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Note. Under its usual procedures, the Depositary mails an Omnibus
Proxy to the issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts interests in the Global Note are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Note will be made to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on the payment date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant
and not of the Depositary, the Paying Agent, or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to the
S-5
<PAGE>
Depositary is the responsibility of the Company or the Paying Agent,
disbursement of such payments to Direct Participants shall be the responsibility
of the Depositary, and disbursement of such payments to the Beneficial Owners
shall be the responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as depository with
respect to the Notes at any time by giving reasonable notice to the Company or
the Paying Agent. Under such circumstances, in the event that a successor
depository is not obtained, definitive Note certificates are required to be
printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor depository).
None of the Company, the Trustee or any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in any Global Note,
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Global Notes representing all but not part of the Notes of the series being
offered hereby are exchangeable for Notes in definitive form of like tenor and
terms if (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Notes or if at any time such
Depositary ceases to be a clearing agency registered as such under the
Securities Exchange Act of 1934, as amended; (ii) the Company executes and
delivers to the Trustee a Company Order that all such Global Notes shall be
exchangeable; or (iii) there shall have occurred and be continuing an Event of
Default or an event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to the Notes. A Global Note
that is exchangeable pursuant to the preceding sentence shall be exchangeable
for Notes issuable in denominations of $1,000 and any integral multiple thereof
and registered in such names as the Depositary holding such Global Note shall
direct. Subject to the foregoing, a Global Note shall not be exchangeable,
except for a Global Note of like denomination to be registered in the name of
such Depositary or its nominee.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution Agreement,
the Notes are being offered on a continuing basis by the Company through
Goldman, Sachs & Co. and CS First Boston Corporation (the "Agents"), who have
agreed to use reasonable efforts to solicit purchases of the Notes. The Company
will have the sole right to accept offers to purchase Notes and may reject any
proposed purchase of Notes in whole or in part. The Agents shall have the right,
in their discretion reasonably exercised, to reject any offer to purchase Notes,
in whole or in part. The Company will pay the Agents a commission of from 0.125%
to 0.750% of the principal amount of Notes, depending upon maturity, for sales
made through them as Agents.
The Company also may sell Notes to the Agents acting as principal for their
own accounts at a discount to be agreed upon at the time of sale, or the
purchasing Agents may receive from the Company a commission or discount
equivalent to that set forth on the cover page hereof in the case of any such
principal transaction in which no other discount is agreed. Such Notes may be
resold at prevailing market prices, or at prices related thereto, at the time of
such resale, as determined by the Agents. The Company reserves the right to sell
Notes directly on its own behalf. No commission will be payable on any Notes
sold directly by the Company.
In addition, the Agents may offer the Notes they have purchased as principal
to other dealers. The Agents may sell Notes to any dealer at a discount and,
unless otherwise specified in the applicable Pricing Supplement, such discount
allowed to any dealer may include all or part of the discount to be received
from the Company. Unless otherwise indicated in an applicable Pricing
Supplement, any Note
S-6
<PAGE>
sold to an Agent as principal will be purchased by such Agent at a price equal
to 100% of the principal amount thereof less a percentage equal to the
commission applicable to any agency sale of a Note of identical maturity. After
the initial public offering of Notes to be resold to investors and other
purchasers on a fixed public offering price basis, the public offering price,
concession and discount may be changed.
The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Act"). The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Act. The Company has agreed to reimburse the Agents for
certain expenses.
The Agents may sell to or through dealers who may resell to investors, and
the Agents may pay all or part of their discount or commission to such dealers.
Such dealers may be deemed to be "underwriters" within the meaning of the Act.
Unless otherwise indicated in an applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately available
funds in The City of New York.
The Agents may be customers of, engage in transactions with and perform
services for the Company in the ordinary course of business
The Notes offered hereby are newly issued securities with no established
trading market and will not be listed on any securities exchange. No assurance
can be given as to the existence or liquidity of the secondary market for the
Notes.
LEGAL OPINIONS
The legality of the Notes will be passed upon for the Company by Lane Powell
Spears Lubersky, 1420 Fifth Avenue, Suite 4100, Seattle, Washington 98101, and
for the Agents by Orrick, Herrington & Sutcliffe, The Old Federal Reserve Bank
Building, 400 Sansome Street, San Francisco, California 94111. Orrick,
Herrington & Sutcliffe will rely, as to matters of Washington law, on the
opinion of Lane Powell Spears Lubersky. D. Wayne Gittinger, a director of
Nordstrom, is a partner in the firm of Lane Powell Spears Lubersky. At October
31, 1994, members of that firm owned directly or indirectly an aggregate of
approximate 5,300,000 shares of common stock of Nordstrom.
S-7
<PAGE>
NORDSTROM CREDIT, INC.
DEBT SECURITIES
---------
Nordstrom Credit, Inc., a Colorado corporation (the "Company"), may offer
from time to time up to $250,000,000 aggregate principal amount of its unsecured
Debt Securities consisting of notes, debentures and other evidences of
indebtedness. The specific title, aggregate principal amounts, maturity, rate or
method of calculation of interest, purchase price, any sinking fund terms, any
terms for redemption and other special terms applicable to the Debt Securities
being offered will be set forth in a supplement to this Prospectus. The Debt
Securities are solely the obligation of the Company and are not guaranteed by
Nordstrom, Inc.
The Debt Securities may be sold directly by the Company or through agents or
to underwriters for public offering pursuant to the plan of distribution
described in the Prospectus and the Prospectus Supplement. If any underwriters
or agents are involved in the sale of the offered Debt Securities, their names
and any applicable fee, commission or discount arrangements with them will be
set forth in the Prospectus Supplement. See "Plan of Distribution."
--------------
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 October 14, 1994.
<PAGE>
AVAILABLE INFORMATION
The Company and Nordstrom, Inc. ("Nordstrom"), a Washington corporation
which owns 100% of the outstanding shares of the Company's common stock, are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, file
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the public reference room of the
Commission at 450 Fifth Street N.W., Washington, D.C. 20549, and the public
reference facilities in the New York Regional Office, 75 Park Place, New York,
New York 10007 and the Chicago Regional Office, Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained at prescribed rates by writing to the Commission,
Public Reference Section, Washington, D.C.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 and the exhibits thereto (the "Registration
Statement") which the Company has filed with the Commission under the Securities
Act of 1933, as amended (the "Act"), and to which reference is hereby made for
further information. The information so omitted may be obtained from the
Commission's principal office in Washington, D.C. upon payment of the fees
prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended January
31, 1994, and the Company's Quarterly Reports on Form 10-Q for the quarters
ended April 30, 1994 and July 31, 1994, which have been filed with the
Commission by the Company, are incorporated into this Prospectus by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated by reference herein,
other than exhibits to such documents which are not specifically incorporated by
reference in the information that this Prospectus incorporates. Requests for
such copies should be directed to: Nordstrom Credit, Inc., 13531 East Caley
Avenue, Englewood, Colorado 80111, Attention: Carol R. Simonson, telephone (303)
397-4780.
2
<PAGE>
THE COMPANY AND NORDSTROM
The principal executive offices of the Company are located at 13531 East
Caley Avenue, Englewood, Colorado 80111, telephone number (303) 397-4700.
BUSINESS OF THE COMPANY
The Company is a wholly-owned subsidiary of Nordstrom. The Company was
incorporated in the state of Washington in 1982 and reincorporated in the state
of Colorado in 1990. The primary business of the Company is to finance customer
accounts receivable arising under revolving charge accounts, contract accounts
and 30-day accounts generated through sales of merchandise in Nordstrom stores
("Accounts") and under revolving charge accounts generated through purchases by
customers utilizing Nordstrom National Credit Bank Visa cards ("Visa Accounts").
Accounts consist primarily of balances due under revolving charge accounts. The
contract accounts for major purchases and 30-day accounts represent less than 1%
of Accounts. Visa Accounts consist of balances due under revolving charge
accounts.
Nordstrom and Nordstrom National Credit Bank, a national banking association
and a wholly-owned subsidiary of Nordstrom (the "Bank"), are parties to a
Merchant Agreement which governs the relationship between the Bank and
Nordstrom, including the origination of Accounts by the Bank. See "Relationship
with Nordstrom." The Company and the Bank are parties to an Operating Agreement
which governs the purchase by the Company of Accounts originated by the Bank and
the servicing of Accounts by the Bank. See "Relationship with Nordstrom." The
Company and the Bank also are parties to a Visa Operating Agreement which
governs the purchase by the Company of Visa Accounts originated by the Bank and
the servicing of Accounts by the Bank. See "Relationship with Nordstrom."
The Company and Nordstrom are parties to an Investment Agreement which,
among other things, governs ownership of Company stock and the financial
relationships between Nordstrom and the Company. Because Nordstrom owns all of
the Company's common stock, Nordstrom controls the management and policies of
the Company. See "Relationship with Nordstrom."
BUSINESS OF NORDSTROM
Nordstrom is a specialty retailer selling a wide selection of apparel, shoes
and accessories for women, men and children. Most of Nordstrom's merchandise
categories are offered in each of its 54 large fashion specialty stores
currently located in Alaska, California, Illinois, Maryland, Minnesota, New
Jersey, Oregon, Utah, Virginia and Washington. In addition, Nordstrom operates
17 clearance stores in California, Illinois, Maryland, Oregon, Pennsylvania,
Utah, Virginia and Washington under the name "Nordstrom Rack," one clearance
store in Arizona, under the name "Last Chance Shoes and Apparel," three smaller
specialty stores in Washington under the name "Place Two," one specialty store
in New York under the name "Faconnable," and leased shoe departments in eleven
department stores in Hawaii. Nordstrom's marketing philosophy is to offer a wide
selection of merchandise, to create customer loyalty by providing a high level
of customer service and to respond rapidly to local market conditions and
fashion trends through decentralized buying and merchandise selection.
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The following table sets forth the total store area (exclusive of corporate
and administrative offices in Seattle, Washington) as of September 1, 1994 of
all stores currently operated by Nordstrom:
<TABLE>
<CAPTION>
TOTAL STORE NUMBER OF
DESCRIPTION AREA STORES
- -------------------------------------------------- ----------- ---------
<S> <C> <C>
Southern California Group......................... 2,687,000 20
Northern California Group......................... 1,922,000 12
Washington Group.................................. 1,251,000 11
Capital Group (Washington, D.C. Area)............. 1,229,000 9
Oregon Group...................................... 823,000 8
Northeast Group................................... 722,000 4
Midwest Group..................................... 534,000 3
Utah Group........................................ 357,000 4
Alaska Group...................................... 97,000 1
Place Two Group................................... 55,000 3
Arizona Group..................................... 26,000 1
----------- --
Total......................................... 9,703,000 76
----------- --
----------- --
</TABLE>
Nordstrom will expand one existing large specialty store and open another in
the fall of 1994 in Bellevue, Washington and Skokie, Illinois, respectively.
These stores will contain a total of approximately 290,000 additional square
feet.
Nordstrom currently anticipates opening four large specialty stores in 1995
in Schaumberg, Illinois, White Plains, New York, Milburn, New Jersey and
Indianapolis, Indiana. These stores will contain a total of approximately
775,000 square feet. Nordstrom also anticipates closing one large specialty
store in 1995 in San Jose, California which contains approximately 150,000
square feet.
Nordstrom currently anticipates opening four large specialty stores in 1996
in King of Prussia, Pennsylvania, Dallas, Texas, Denver, Colorado and Troy,
Michigan. These stores will contain a total of approximately 900,000 square
feet.
Nordstrom is also considering other locations in Texas and the Southwest,
the Midwest, and the Eastern United States for potential store openings. With
respect to any proposed store, it is possible that in one or more instances
store site negotiations may be terminated and the store may not be built, or
delays may occur. Furthermore, environmental and land use regulations and the
difficulties encountered by shopping center developers in securing financing
could make future development of stores more difficult, time-consuming and
expensive.
RELATIONSHIP WITH NORDSTROM
MERCHANT AGREEMENT
Nordstrom and the Bank are parties to a Merchant Agreement and Operating
Procedures dated August 30, 1991 (the "Merchant Agreement") whereby the Bank
issues Accounts through Nordstrom credit cards issued by the Bank for use in
Nordstrom stores. Pursuant to the Merchant Agreement, the Bank pays to Nordstrom
on a daily basis the amount of all charges on Accounts for each such day, less
the amounts of any sales adjustments and less an allowance for amounts to be
written off. The Merchant Agreement requires that Nordstrom pay a servicing fee
to the Bank which may change from time to time but is currently .25% of the net
face amount of each sale, less any sales adjustments.
OPERATING AGREEMENTS
OPERATING AGREEMENT. Nordstrom Account servicing arrangements are governed
by an Operating Agreement dated August 30, 1991 (the "Operating Agreement")
between the Company and the Bank pursuant to which the Company purchases
Accounts from the Bank for a price equal to the amount of Accounts originated
less an allowance for amounts to be written off. Under the Operating Agreement
the Bank performs the servicing functions for the Accounts and the Company pays
the Bank a servicing
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<PAGE>
fee which may change from time to time but is currently 1.59% of the amount of
the Accounts originated. The Bank's servicing responsibilities include new
account processing, authorizing, billing, payment processing, collection and
customer service activities. The Company has purchased all Accounts originated
by the Bank since the Bank's inception.
VISA OPERATING AGREEMENT. Visa Account servicing arrangements are governed
by an Operating Agreement for Visa Accounts and Receivables dated May 1, 1994
(the "Visa Operating Agreement") between the Company and the Bank pursuant to
which the Company purchases Visa Accounts from the Bank on the same terms and
conditions as under the Operating Agreement, with the exception of the allowance
for amounts to be written off. Amounts written off will be charged to the
Company, except for amounts written off with respect to sales occurring at
Nordstrom stores, for which Nordstrom has agreed to indemnify the Company. Under
the Visa Operating Agreement the Bank performs the servicing functions for the
Visa Accounts and the Company pays the Bank a servicing fee which may change
from time to time but is currently 1.59% of the amount of the Visa Accounts
originated. The Bank's servicing responsibilities include new account
processing, authorizing, billing, payment processing, collection and customer
service activities.
OLD OPERATING AGREEMENT. The Company and Nordstrom are parties to an
Operating Agreement dated February 1, 1989 (the "Old Operating Agreement")
pursuant to which the Company has agreed to purchase any accounts originated by
Nordstrom. Since Nordstrom organized the Bank to originate Accounts, no Accounts
have been originated by Nordstrom and the obligations of the Old Operating
Agreement, while remaining in effect, have had no recent practical application.
INVESTMENT AGREEMENT
The Investment Agreement dated October 8, 1984 (the "Investment Agreement")
imposes certain commitments upon Nordstrom, the most stringent of which is to
maintain the Company's ratio of Income Available for Fixed Charges to Fixed
Charges at not less than 1.25:1. "Fixed Charges" are defined in the Investment
Agreement as the interest charges on the aggregate principal amount of all debt
of the Company outstanding during the period. "Income Available for Fixed
Charges" is defined as the net income of the Company determined in accordance
with generally accepted accounting principles, except that the determination is
to be made before any deduction for Fixed Charges or any provisions for taxes in
respect of income. The Investment Agreement requires that Nordstrom retain
ownership of all of the outstanding shares of stock of the Company, and provides
for the subordination of all debt owed by the Company to Nordstrom and its
affiliated companies to debt owed by the Company to unrelated third parties
("Prior Debt"). The Investment Agreement further provides that Nordstrom will
maintain an aggregate amount of investment (including affiliated debt and
shareholder's equity) in the Company of at least $1.00. The Investment Agreement
provides that it may be modified by Nordstrom and the Company provided that if
any modification adversely affects any holders of Prior Debt, the modification
will be effective only upon the consent of 66 2/3% of the holders of Prior Debt.
The Investment Agreement also provides that it may not be terminated until all
of the Company's debt outstanding on the date of the giving of 30 days' notice
of termination has been paid. The Indenture (as defined below) also imposes
limitations on amendments to or termination of the Investment Agreement. See
"Description of Debt Securities -- Certain Covenants of the Company."
The Company has been included in the consolidated income tax returns of
Nordstrom since its formation. Nordstrom will prepare and file federal, state
and local income tax returns for and on behalf of the Company. The Company will
pay to Nordstrom the amount of income taxes for which the Company would have
been liable if it had filed its own returns. For any year in which the Company
has a loss that reduces the consolidated income tax liability of Nordstrom, the
Company and Nordstrom's other subsidiaries, Nordstrom will pay the Company the
amount of such reduction in tax liability. In the event any adjustment is made
to the federal, state or local tax returns, the liability of Nordstrom and the
Company is to be recomputed and payments will be allocated accordingly.
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<PAGE>
INTERCOMPANY SERVICES
Nordstrom presently furnishes the following administrative services to the
Company: officer and director liability insurance, and executive, financial,
legal, tax and other corporate staff functions. Nordstrom charges the Company
for the actual costs incurred or a reasonable allocation of Nordstrom's total
cost for such services.
CREDIT ARRANGEMENTS
The Company and Nordstrom do not have any joint borrowing arrangements and
there are no guarantees by Nordstrom of the payment of any debt of the Company.
FINANCING OF THE COMPANY
To finance the purchase of Accounts and Visa Accounts, the Company has
incurred and will incur indebtedness, including the Debt Securities issued under
this Prospectus. The nature and amount of such indebtedness of the Company will
vary from time to time, depending upon business requirements, market conditions
and other factors of Nordstrom and the Bank. From time to time, Nordstrom has
loaned excess funds to the Company on a short-term basis. The Company has a
$90,000,000 unsecured line of credit with a group of commercial banks with First
Interstate Bank of Denver, N.A., as agent, which expires on June 23, 1995 and a
$60,000,000 unsecured line of credit with Bank of America National Trust and
Savings Association which expires on June 30, 1995. Under the terms of these
lines of credit, the Company must, among other things, comply with the terms of
the Investment Agreement and the Operating Agreement and maintain a ratio of
consolidated total debt to consolidated tangible net worth at the end of each
fiscal quarter no greater than 5 to 1 for purposes of the $90,000,000 agreement
and no greater than 6 to 1 for purposes of the $60,000,000 agreement. These
lines of credit serve as liquidity support for the Company's short-term debt.
These commitments may require additional equity investments by Nordstrom in the
Company as the Company incurs additional indebtedness.
USE OF PROCEEDS
Except as may be set forth in the Prospectus Supplement, the Company intends
to add the net proceeds from the sale of Debt Securities to the general funds of
the Company to be available primarily for the purchase of Accounts and Visa
Accounts. The Company may also repay short-term borrowings used to purchase
Accounts and Visa Accounts or refinance portions of outstanding medium-term
notes. Pending such uses, the Company may invest all or a portion of the
proceeds in investment grade short-term instruments.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Company and Nordstrom and its subsidiaries for each of the fiscal years
ended 1990 through 1994 and for the six months ended July 31, 1994.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY 31,
-------------------------------- SIX MONTHS ENDED
1990 1991 1992 1993 1994 JULY 31, 1994
---- ---- ---- ---- ---- -----------------
<S> <C> <C> <C> <C> <C> <C>
Company....................... 1.39 1.45 1.69 1.87 2.09 2.19
Nordstrom..................... 3.60 3.35 3.98 4.41 4.95 6.42
</TABLE>
For the purpose of these ratios, earnings consist of earnings before income
taxes plus fixed charges less capitalized interest, as applicable. Fixed charges
consist of interest expense, capitalized interest and the estimated interest
portion of rent expense, as applicable.
DESCRIPTION OF DEBT SECURITIES
The notes, debentures and other evidences of indebtedness (the "Debt
Securities") will be issued under an indenture dated as of November 15, 1984, as
supplemented by First, Second and Third Supplemental Indentures dated as of
January 15, 1988, June 1, 1989 and October 19, 1990, respectively (as
supplemented, the "Indenture"), between the Company and First Interstate Bank of
Washington,
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<PAGE>
N.A., as Trustee (the "Trustee"), and will rank equally with all other unsecured
and unsubordinated indebtedness of the Company. A copy of the Indenture has been
filed as an exhibit to the Registration Statement. The following description
summarizes certain provisions of the Indenture. Whenever any particular article
or section of the Indenture or any term defined therein is referred to, such
article, section or definition is incorporated by reference, and the statement
in connection with which such reference is made is qualified in its entirety by
such reference. Whenever a defined term is indicated by capital letters, the
definition thereof is contained in this Prospectus or in the Indenture. As of
the date of this Prospectus the Company had four series of debt securities
outstanding under the Indenture: $75,000,000 aggregate principal amount of
Medium-Term Notes, Series A, $44,000,000 aggregate principal amount of Medium-
Term Notes, Series B, $50,000,000 aggregate principal amount of Medium-Term
Notes, Series C, and $43,100,000 aggregate principal amount of 9 3/8% Sinking
Fund Debentures due 2016.
GENERAL
The Indenture does not limit the aggregate principal amount of the Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in series. (Section 301) The Debt Securities will be
unsecured obligations of the Company.
A Prospectus Supplement will describe the following terms of the Debt
Securities then being offered: (1) the title of the Debt Securities; (2) any
limit on the aggregate principal amount of the Debt Securities; (3) the date or
dates on which the Debt Securities will mature; (4) the rate or rates or the
method or methods of determining the rate or rates at which the Debt Securities
will bear interest, if any, and the date from which such interest, if any, will
accrue; (5) the dates on which such interest, if any, on the Debt Securities
will be payable and the record dates for such Interest payment dates; (6) the
place or places where principal of (and premium, if any) and interest, if any,
on the Debt Securities shall be payable and, if other than as set forth in the
Indenture, the method or methods of payment; (7) any mandatory or optional
sinking fund or analogous provisions; (8) any redemption terms; (9) the portion
of the principal amount of the Debt Securities, if other than the principal
amount thereof, payable upon acceleration of maturity thereof; (10) whether the
Debt Securities are to be issued in whole or in part in the form of one or more
Global Security or Securities, and, if so, the identity of the depositary for
such Global Security or Securities and any special provisions with respect to
such Global Security or Securities; (11) additional events of default, if any;
(12) any additional restrictive covenants included for the benefit of the
holders of such Debt Securities; and (13) any other terms of the Debt Securities
not inconsistent with the provisions of the Indenture. (Section 301)
CERTAIN COVENANTS OF THE COMPANY
CERTAIN DEFINITIONS APPLICABLE TO COVENANTS. "Subsidiary" of the Company is
defined as a corporation more than 50% of the outstanding voting stock of which
is owned, directly or indirectly, by the Company or by one or more Subsidiaries
of the Company. "Restricted Subsidiary" is defined as a Subsidiary of the
Company substantially all the assets of which are located within, and operating
substantially entirely within, the present 50 states of the United States,
excluding, however, any Subsidiary of the Company designated by the Board of
Directors, provided that at the time of such designation there exists no Event
of Default which has not been cured or waived, and the Company could issue at
least $1.00 of additional Debt secured by a Mortgage, as more fully described
under "Restrictions on Liens and Encumbrances." "Property" is defined as all
tangible and intangible property of the Company and any Restricted Subsidiary,
including rights in and to any such property and accounts (including installment
payment accounts and accounts receivable) owned by the Company or any Restricted
Subsidiary. "Consolidated Net Earnings" is defined as consolidated net earnings
(or deficit) of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles
excluding net income or loss (a) of a Restricted Subsidiary for any period
during which it was not a Restricted Subsidiary, and (b) of any acquired
business prior to its acquisition. "Consolidated Assets" is defined as the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting all goodwill and like intangibles, as set
forth on the most recent balance sheet of the Company and its consolidated
Subsidiaries. (Section 101)
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<PAGE>
RESTRICTIONS ON LIENS AND ENCUMBRANCES. The Indenture provides that the
Company may not, nor may it permit any Restricted Subsidiary to, create, assume
or guarantee any loan or evidence of indebtedness for money borrowed ("Debt")
secured by a pledge, mortgage or lien ("Mortgage") on any Property of the
Company or any Restricted Subsidiary, or on any shares of capital stock or Debt
of any Restricted Subsidiary, without securing or causing the Restricted
Subsidiary to secure the Debt Securities and all other securities issued under
the Indenture equally and ratably with (or, at the Company's option, prior to)
such secured Debt, unless the aggregate amount of all Debt secured by Mortgages
would not exceed 15% of Consolidated Assets. (Section 1005)
This restriction does not apply to, and there is excluded from secured Debt
in any computation under such restriction, Debt secured by (1) Mortgages
existing as of the date of the Indenture and securing Debt existing as of the
date of the Indenture; (2) Mortgages on property of, or on any shares of capital
stock of or Debt of, any corporation existing at the time such corporation
becomes a Restricted Subsidiary; (3) Mortgages in favor of the Company or a
Restricted Subsidiary; (4) Mortgages in favor of governmental bodies to secure
progress or advance payments; (5) Mortgages on property, shares of stock or Debt
existing at the time of acquisition thereof and the related purchase money and
construction Mortgages which are entered into within specified limits; (6)
Mortgages securing certain tax-free obligations issued by a State, territory or
possession of the United States, or any political subdivision of any of the
foregoing, or the District of Columbia to finance the acquisition or
construction of property; and (7) any extension, renewal or refunding of any
Mortgage referred to in the foregoing clauses (1) through (6), inclusive.
(Section 1005)
INVESTMENT AND OPERATING AGREEMENTS. The Indenture provides that the
Company (1) will observe and perform in all material respects all covenants or
agreements of the Company contained in the Investment Agreement and the Old
Operating Agreement; (2) will cause Nordstrom to observe and perform in all
material respects all covenants or agreements of Nordstrom contained in such
agreements; and (3) will not waive compliance under, amend in any material
respect or terminate such agreements; provided, however, that either of such
agreements may be amended if as a result there is no downgrading or revocation
of any credit ratings on the Debt Securities or any other securities of the
Company. (Section 1008) These restrictions do not apply to the Operating
Agreement between the Company and the Bank.
RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS. The Indenture provides
that the Company will not declare any dividends on any class of its stock or
make any payment on account of, or set apart money for a sinking or other
analogous fund for, the purchase, redemption or other retirement of any shares
of such stock, or make any distribution in respect thereof (collectively, the
"Stock Payments"), unless such dividends are declared to be payable not more
than 60 days after the date of declaration and unless, after giving effect to
such proposed Stock Payments, no Event of Default has occurred which has not
been cured or waived, and all dividends declared and any payment set apart or
made during the period beginning November 1, 1984, to and ending on the
computation date (the "Computation Period"), are less than the sum of (a) 50
percent (or all, in case of a deficit) of the Consolidated Net Earnings computed
for the Computation Period; plus (b) the aggregate of all contributions to
capital (including the fair value of property other than cash) received by the
Company during the Computation Period; plus (c) the aggregate net proceeds
(including the fair value of property other than cash) received by the Company
from the issue or sale of any class of its stock during the Computation Period.
This restriction does not apply to dividends or distributions payable solely in
any class of Company stock, or the purchase, redemption or other retirement of
Company stock by exchange for, or out of proceeds of the substantially
concurrent sale of, shares of any other class of Company stock or the
application to the purchase, redemption or other retirement of any such stock of
moneys previously and properly set apart for and then held in a sinking or other
fund as established for such stock. (Section 1007)
The Company will not permit any Subsidiary to purchase any stock of any
class of the Company. (Section 1007)
8
<PAGE>
RESTRICTIONS ON MERGER AND CONSOLIDATION. The Indenture provides that no
consolidation or merger of the Company with or into any other corporation and no
conveyance, transfer or lease of its property substantially as an entirety shall
be made to another person unless (i) the surviving, acquiring or leasing
corporation, if other than the Company, is a domestic corporation that expressly
assumes, by a supplemental Indenture, all obligations of the Company under the
Indenture, including the due and punctual payment of the principal of and
premium, if any, and interest, if any, on the Debt Securities; (ii) no default
or Event of Default shall have happened and be continuing; (iii) no properties
or assets owned by the Company shall become subject to any mortgage, pledge,
lien, security interest or other encumbrance (other than those permitted by
Section 1005) as a result of such transaction, unless the Debt Securities shall
be equally and ratably secured thereby; and (iv) an officer of the Company and
counsel for the Company shall confirm in writing that all conditions to such
transaction contained in the Indenture have been satisfied. (Section 801)
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (1) default in the payment of principal of or any
premium on any Debt Securities of that series when due; (2) default in the
payment of any interest on any Debt Securities of that series when due,
continued for 30 days; (3) default in the deposit of any sinking fund payment,
when due, in respect of any Debt Securities of that series; (4) default in the
performance of any other covenant of the Company in the Indenture (other than a
covenant included in the Indenture solely for the benefit of a series of the
Debt Securities other than that series), continued for 60 days after written
notice as provided in the Indenture; (5) default in payment or acceleration of
the Debt Securities of any other series or any other indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries in excess of
$5,000,000, or a default under any capitalized lease obligation of the Company
or a Restricted Subsidiary under which the Company or a Restricted Subsidiary is
obligated to pay in excess of $5,000,000, or a default under any mortgage or
indenture under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed in excess of $5,000,000 by the
Company or a Restricted Subsidiary if the default is not cured or such
acceleration is not annulled or such indebtedness is not discharged within 10
days after written notice as provided in the Indenture; (6) the failure to
satisfy or obtain a stay within 60 days of entry of a final judgment by a court
against the Company or a Restricted Subsidiary for the payment of money in
excess of $1,000,000; (7) any Event of Default under the Indenture dated
December 15, 1983, as amended or supplemented from time to time, between
Nordstrom and First Interstate Bank of Washington, N.A., as Trustee; and (8)
certain events in bankruptcy, insolvency or reorganization. No Event of Default
with respect to the Debt Securities of a particular series necessarily
constitutes an Event of Default with respect to the Debt Securities of any other
series. (Section 501)
If an Event of Default with respect to the Debt Securities of any series at
the time outstanding occurs and is continuing, either the Trustee or the Holders
of at least 25 percent 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 Debt 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 declaration of acceleration with respect to Debt Securities of
any
- --------------
(1) In the case of Securities issued under the Indenture prior to January 15,
1988, each dollar amount in clause (5) is $1,000,000 rather than $5,000,000.
As a consequence, holders of such Securities may be able to cause an
acceleration of the payment obligations of such Securities before holders of
the Debt Securities offered hereby may be able to accelerate the payment
obligations of such Debt Securities, or holders of such Debt Securities may
not be able to accelerate such payment obligations at all. As of the date of
this Prospectus, $43,100,000 of Securities issued under the Indenture prior
to January 15, 1988 were outstanding.
9
<PAGE>
series has been made, but before a judgment or decree based on acceleration has
been obtained, the Holders of a majority in principal amount of the Outstanding
Debt Securities of that series may, under certain circumstances, rescind and
annul such acceleration. (Section 502)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 603) Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of that series, and to waive
certain defaults. The Trustee, with respect to the direction of the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, or the Company, with
respect to waiving any default, may set a record date for any Act of the
Holders. (Sections 512 and 513)
The right of a Holder of any Debt Securities to institute a proceeding with
respect to the Indenture is subject to certain conditions precedent, but each
Holder has an absolute right to receive payment of principal or premium and
interest, if any, when due and to institute suit for the enforcement of any such
payment. (Sections 507 and 508) The Indenture provides that the Trustee, within
90 days after the occurrence of a default with respect to the Debt Securities of
any series, is required to give the Holders of such Debt Securities notice of
such default, unless cured or waived; provided that, except in the case of
default in the payment of principal, or premium or interest, if any, or in the
payment of any sinking fund installment, the Trustee may withhold such notice if
it determines it is in the interest of such Holders to do so. (Section 602)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1008)
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made by the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of all series of the outstanding Debt Securities
issued under the Indenture which are affected by the modification or amendment,
provided that no such modification or amendment may, without the consent of each
Holder of such Debt Securities affected thereby, (1) change the stated maturity
date of the principal of, or any installment of principal of or interest on, any
such Debt Security; (2) reduce the principal amount of, the rate of interest on,
or any premium payable upon redemption of, any such Debt Security or the
principal amount due upon acceleration of an Original Issue Discount Security;
(3) modify the manner of determination of the rate of interest on any Debt
Security so as to affect adversely the interest of such Holder; (4) change the
place or currency of payment of principal (or premium, if any) or interest, if
any, on any such Debt Security; (5) impair the right to institute suit for the
enforcement of any such payment on or with respect to any such Debt Security;
(6) reduce the above-stated percentage of Holders necessary to modify or amend
the Indenture; or (7) modify the foregoing requirements or reduce the percentage
of outstanding Debt Securities necessary to waive compliance with certain
provisions of the Indenture or for waiver of certain defaults. The Company may
set a record date for any Act of the Holders with respect to consenting to any
amendment. (Section 902)
CONCERNING THE TRUSTEE
The Trustee under the Indenture also is the trustee under an indenture
covering an outstanding issue of notes of Nordstrom. The Trustee and its
affiliates are depositories of the Company and Nordstrom, have from time to time
made loans to the Company and to Nordstrom and its other subsidiaries and have
performed other services for the Company and Nordstrom in the normal course of
business. The Trustee also acts as trustee with respect to the Company's
outstanding notes and debentures. The Company expects to continue to conduct
such transactions with the Trustee and its affiliates. Under the
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provisions of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), upon the occurrence and continuance of a default under an indenture, if a
trustee has a conflicting interest (as defined in the Trust Indenture Act) the
trustee must, within 90 days, either eliminate such conflicting interest or
resign. Under the provisions of the Trust Indenture Act, an indenture trustee
shall be deemed to have a conflicting interest if, upon the occurrence of a
default under the indenture, the trustee is a creditor of the obligor. If the
trustee fails either to eliminate the conflicting interest or to resign within
10 days after the expiration of such 90-day period, the trustee is required to
notify security holders to this effect and any security holder who has been a
bona fide holder for at least six months may petition a court to remove the
trustee and to appoint a successor trustee.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include one or more firms, or may be a group of underwriters
represented by firms including one or more of such firms. Such firms may also
act as 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, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Act. Any such underwriter or agent will be identified, and
any such compensation received from the Company will be described, in the
Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
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 Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the 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 responsibilities in respect of the validity or performance of such
contracts.
Debt Securities will be a new issue of securities with no established
trading market. Any underwriters or agents to or through whom Debt Securities
are sold by the Company for public offering and sale may make a market in such
Debt Securities, but such underwriters or agents will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Debt Securities.
11
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LEGAL OPINIONS
The legality of the Debt Securities will be passed upon by Lane Powell
Spears Lubersky, 1420 Fifth Avenue, Suite 4100, Seattle, Washington 98101. D.
Wayne Gittinger, a director of Nordstrom, is a partner in the firm of Lane
Powell Spears Lubersky. At September 1, 1994, members of that firm owned
directly or indirectly an aggregate of approximately 5,300,000 shares of common
stock of Nordstrom.
EXPERTS
The financial statements and related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the fiscal year ended January 31, 1994 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of Deloitte & Touche LLP given upon their authority as experts in
accounting and auditing.
12
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH
INFORMATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Selected Financial Data of the Company............. S-2
Recent Developments................................ S-3
Selected Consolidated Financial Data of
Nordstrom......................................... S-3
Description of Notes............................... S-4
Supplemental Plan of Distribution.................. S-6
Legal Opinions..................................... S-7
PROSPECTUS
Available Information.............................. 2
Incorporation of Certain Documents by Reference.... 2
The Company and Nordstrom.......................... 3
Relationship with Nordstrom........................ 4
Use of Proceeds.................................... 6
Ratios of Earnings to Fixed Charges................ 6
Description of Debt Securities..................... 6
Plan of Distribution............................... 11
Legal Opinions..................................... 12
Experts............................................ 12
</TABLE>
$100,000,000
N_O_R_D_S_T_R_O_M C_R_E_D_I_T, I_N_C.
MEDIUM-TERM NOTES, SERIES C
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
CS FIRST BOSTON
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