Filed pursuant to Rule 424(b)(5)
Registration No. 33-52695
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 15, 1995)
$150,000,000
PAINE WEBBER GROUP INC.
7 5/8% NOTES DUE 2008
------------
Interest on the Notes will accrue from October 11, 1996 and will be payable
semi-annually on April 15 and October 15, beginning April 15, 1997.
The Notes will mature on October 15, 2008 and are not redeemable prior to
maturity.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price Underwriting Proceeds
to Discounts and to
Public(1) Commissions Company(1)(2)
<S> <C> <C> <C>
Per Note.......................... 99.905% .650% 99.255%
Total............................. $149,857,500 $975,000 $148,882,500
</TABLE>
(1) Plus accrued interest, if any, from October 11, 1996 to date of delivery.
(2) Before deducting expenses payable by Paine Webber Group Inc. (the "Company")
estimated to be $90,000. See "Underwriting."
------------
The Notes are offered subject to receipt and acceptance by the Underwriter,
to prior sale and to the Underwriter's right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Notes will be made in New York, New York, on or about
October 11, 1996.
This Prospectus Supplement and the accompanying Prospectus may be used by
the Company, PaineWebber Incorporated ("PaineWebber") or other affiliates of the
Company in connection with offers and sales related to secondary market
transactions in the Notes at negotiated prices related to prevailing market
prices at the time of sale or otherwise. PaineWebber or such other Company
affiliates may act as principal or agent in such transactions.
-------------------
PAINEWEBBER INCORPORATED
-------------------
The date of this Prospectus Supplement is October 8, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY OR OTHER SECURITIES OF PAINE WEBBER GROUP INC. AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
THE COMPANY
Paine Webber Group Inc. is a holding company which, together with its
operating subsidiaries, forms one of the largest full-service securities and
commodities firms in the industry. Founded in 1879, the Company employs
approximately 15,800 people in 302 offices worldwide.
The Company's principal line of business is to serve the investment and
capital needs of individual, corporate, institutional and public agency clients
through its broker-dealer subsidiary, PaineWebber, and other specialized
subsidiaries. The Company holds memberships in all major securities and
commodities exchanges in the United States, and makes a market in many
securities traded on Nasdaq National Market or on other over-the-counter
markets. Additionally, PaineWebber is a primary dealer in U.S. government
securities.
The Company is comprised of interrelated business groups, including
Research, the Private Client Group, the Municipal Securities Group, Investment
Banking, Asset Management, Global Fixed Income and Commercial Real Estate, and
Global Equities and Transaction Services, which utilize common operational and
administrative personnel and facilities.
The Research Group provides investment advice to institutional and
individual investors, and other business areas of the Company, on approximately
890 companies in 62 industry sectors.
The Private Client Group consists primarily of a domestic branch office
system and consumer product groups through which PaineWebber and certain other
subsidiaries provide clients with financial services and products, including the
purchase and sale of securities, option contracts, commodity and financial
futures contracts, fixed income instruments, mutual funds, trusts and selected
insurance products. The Company may act as a principal or agent in providing
these services. Fees charged vary according to the size and complexity of a
transaction, and the activity level of a client's account.
The Municipal Securities Group originates, underwrites, sells and trades
taxable and tax-exempt issues for municipal and public agency clients.
Through the Investment Banking group, the Company provides financial advice
to, and raises capital for, a broad range of domestic and international
corporate clients. Investment Banking manages and underwrites public and private
offerings, participates as an underwriter in syndicates of public offerings
managed by others, and provides advice in connection with mergers and
acquisitions, restructurings and recapitalizations.
The Asset Management group is comprised of Mitchell Hutchins Asset
Management Inc. ("MHAM"), Mitchell Hutchins Institutional Investors Inc.
("MHII") and Mitchell Hutchins Investment Advisory division ("MHIA"). MHAM and
MHII provide investment advisory and portfolio management services to
individuals and mutual funds. MHIA provides portfolio management services to
individuals, trusts and institutions.
Through the Global Fixed Income and Global Equities groups, the Company
places securities for, and executes trades on behalf of, institutional clients
both domestically and internationally. In addition, the Company takes positions
in both listed and over-the-counter equity securities and fixed income
securities to facilitate client transactions or for the Company's own account.
The Commercial Real Estate group provides a full range of capital market
services to real estate clients, including underwriting of debt and equity
securities, principal lending activity, debt restructuring, property sales and
bulk sales services, and a broad range of other advisory services.
The Transaction Services Group includes correspondent services, prime
brokerage and securities lending businesses, and specialist trading. Through
Correspondent Services Corporation, the Company
S-2
<PAGE>
provides execution and clearing services to broker-dealers in the U.S. and
overseas. The Company also acts as a specialist responsible for executing
transactions and maintaining an orderly market in certain securities.
The Company's businesses operate in one of the nation's most highly
regulated industries. Violations of applicable regulations can result in the
revocation of broker-dealer licenses, the imposition of censures or fines, and
the suspension or expulsion of a firm. The Company's businesses are regulated by
various agencies, including the Securities and Exchange Commission, The New York
Stock Exchange, Inc., the Commodity Futures Trading Commission and the National
Association of Securities Dealers, Inc. (the "NASD").
The Company's principal executive offices are located at 1285 Avenue of the
Americas, New York, New York 10019 (Telephone: (212) 713-2000).
For purposes of the foregoing description, all references to the "Company"
refer collectively to Paine Webber Group Inc. and its operating subsidiaries,
unless the context otherwise requires.
USE OF PROCEEDS
The net proceeds, after payment of underwriting discounts and expenses, from
the sale of the Notes offered hereby, estimated to be approximately
$148,792,500, will be used by the Company for general corporate purposes.
S-3
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company at June 30, 1996, and as adjusted to reflect the sale of the Notes
offered hereby.
<TABLE>
<CAPTION>
JUNE 30, 1996
-------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS EXCEPT
SHARES)
<S> <C> <C>
Long-Term Debt(1):
Medium-Term Senior Notes......................................... $ 688,575 $ 688,575
Medium-Term Subordinated Notes................................... 282,150 282,150
7% Notes Due March 1, 2000....................................... 199,712 199,712
6 1/4% Notes Due June 15, 1998................................... 199,743 199,743
6 1/2% Notes Due November 1, 2005................................ 199,425 199,425
7 5/8% Notes Due February 15, 2014............................... 199,286 199,286
7 3/4% Subordinated Notes Due September 1, 2002.................. 170,706 170,706
9 1/4% Notes Due December 15, 2001............................... 150,000 150,000
8 7/8% Notes Due March 15, 2005.................................. 116,485 116,485
7 7/8% Notes Due February 15, 2003............................... 99,972 99,972
Convertible Debentures........................................... 14,719 14,719
Zero Coupon Bonds................................................ 21,225 21,225
8 1/4% Notes Due May 1, 2002..................................... 115,620 115,620
6 3/4% Notes Due February 1, 2006................................ 94,688 94,688
7 5/8% Notes Due October 15, 2008 offered hereby................. -- 149,858
Redeemable Preferred Stock......................................... 187,208 187,208
Stockholders' Equity:
Convertible Preferred Stock...................................... 100,000 100,000
Common Stock, $1 par value, 200,000,000 shares authorized;
105,420,742 shares issued at June 30, 1996...................... 105,421 105,421
Additional Paid-in Capital....................................... 840,805 840,805
Retained Earnings................................................ 874,584 874,584
Common Stock held in Treasury, at cost: 12,376,960 shares at June
30, 1996........................................................ (254,834) (254,834)
Unamortized Cost of Restricted Stock Awards...................... (38,788) (38,788)
Foreign Currency Translation Adjustment.......................... (2,813) (2,813)
---------- -----------
Total Capitalization............................................... $4,363,889 $ 4,513,747
---------- -----------
---------- -----------
</TABLE>
- ------------
(1) In addition to the indebtedness shown in the foregoing table, the Company
and its consolidated subsidiaries had outstanding at June 30, 1996,
short-term bank loans totalling $503,960,000, and commercial paper totalling
$725,512,000.
S-4
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated.
SIX MONTHS
FISCAL YEAR ENDED DECEMBER 31 ENDED
- ------------------------------------ JUNE 30
1991 1992 1993 1994 1995 1996
- ---- ---- ---- ---- ---- ----------
1.2 1.4 1.3 1.0 1.1 1.3
For purposes of computing the ratio of earnings to fixed charges, "earnings"
consist of earnings before taxes on income and fixed charges and "fixed charges"
consist of interest expense incurred on securities sold under repurchase
agreements, short-term and long-term borrowings and that portion of rental
expense estimated to be representative of the interest factor.
DESCRIPTION OF NOTES
The Notes are entitled 7 5/8% Notes Due 2008, are unsecured, and will be
issued as a series of Senior Securities under an Indenture dated as of March 15,
1988, as amended by a supplemental indenture dated as of September 22, 1989, and
by a supplemental indenture dated as of March 22, 1991, between the Company and
The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (the
"Trustee"), which is more fully described in the accompanying Prospectus (as so
amended, the "Indenture"). The statements under this caption are brief summaries
of certain provisions of the Notes, do not purport to be complete, and are
qualified in their entirety by reference to the Notes and the description of the
general terms and provisions of the Securities set forth under the caption
"Description of Securities" in the accompanying Prospectus.
GENERAL
The Notes will be limited to $150,000,000 aggregate principal amount, will
be issued in fully registered form only in denominations of $1,000 and any
integral multiple thereof, and will mature on October 15, 2008. The Notes are
not redeemable by the Company prior to maturity.
The principal and interest on the Notes will be payable and the Notes may be
transferred or exchanged at the principal corporate trust office of the Trustee
in the Borough of Manhattan, The City of New York, or at such other places as
may be designated pursuant to the Indenture, provided that payment of interest
may be made at the option of the Company by check mailed to registered holders.
The Notes may be transferred or exchanged, subject to the limitations provided
in the Indenture, without the payment of any service charge, other than any tax
or other governmental charge payable in connection therewith.
INTEREST
Interest on the Notes will accrue from October 11, 1996 at the rate of 7
5/8% per annum and will be payable semi-annually on April 15 and October 15 of
each year, beginning April 15, 1997, to the persons in whose names the Notes are
registered at the close of business on the next preceding April 1 and October 1,
and may be paid by checks mailed to such persons.
CERTAIN RESTRICTIVE PROVISIONS
The provisions set forth under the caption "Description of
Securities--Certain Restrictive Provisions" in the accompanying Prospectus will
apply to the Notes.
DEFEASANCE
The Notes will be subject to defeasance as set forth under the caption
"Description of Securities-- Defeasance" in the accompanying Prospectus.
S-5
<PAGE>
INFORMATION CONCERNING THE TRUSTEE
The Chase Manhattan Bank, Trustee under the Indenture, is a depositary for
funds and performs other services for, and transacts other banking business
with, the Company in the normal course of business.
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting Agreement,
the Company has agreed to sell to PaineWebber, the sole Underwriter, and the
Underwriter has agreed to purchase from the Company the entire $150,000,000
aggregate principal amount of the Notes. The Company has been advised by the
Underwriter that it proposes initially to offer the 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 0.40% of
the principal amount of the Notes. The Underwriter may allow and such dealers
may reallow a concession not in excess of 0.25% of such principal amount. After
the initial public offering, the public offering price and such concessions may
be changed.
The Notes are a new issue of securities with no established trading market.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriter that it presently
intends to make a market in the Notes, as permitted by applicable laws and
regulations. The Underwriter is not obligated, however, to make a market in the
Notes and any such market making may be discontinued at any time at the sole
discretion of the Underwriter. No assurance can be given as to whether a trading
market for the Notes will develop or as to the liquidity of any such trading
market.
The Underwriter is a wholly owned subsidiary of the Company. The
underwriting of the Notes offered hereby will conform to the requirements set
forth in Rule 2720 of the Conduct Rules of the NASD.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, or
contribute to payments which the Underwriter may be required to make in respect
thereof.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1995, incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated in the accompanying Prospectus by reference.
Such consolidated financial statements are incorporated in the accompanying
Prospectus by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
S-6
<PAGE>
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- ------------------------------------------- --------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION NOT CONTAINED IN THIS [PAINE WEBBER LOGO]
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY PAINE WEBBER GROUP
INC. OR THE UNDERWRITER. THIS PROSPECTUS $150,000,000
SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION.
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS AT ANY TIME DOES NOT IMPLY PAINE WEBBER GROUP INC.
THAT THE INFORMATION THEY CONTAIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE
DATES.
------------------- 7 5/8% NOTES DUE 2008
TABLE OF CONTENTS
PAGE
----
Prospectus Supplement
The Company......................... S-2
Use of Proceeds..................... S-3 -------------------
Capitalization...................... S-4 PROSPECTUS SUPPLEMENT
Ratio of Earnings to Fixed -------------------
Charges............................ S-5
Description of Notes................ S-5
Underwriting........................ S-6
Experts............................. S-6
Prospectus
Available Information............... 2 PAINEWEBBER INCORPORATED
Documents Incorporated
by Reference...................... 2
The Company......................... 3
Use of Proceeds..................... 4
Ratio of Earnings to Fixed
Charges............................ 4
Description of Securities........... 4 -------------------
ERISA Matters....................... 16
Plan of Distribution................ 17
Limitations on Issuance of Bearer
Securities......................... 18
Legal Matters....................... 18
Experts............................. 19 October 8, 1996
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