Registration No. 33-49971
Rule 424(b)(3)
Pricing Supplement No. 32
Dated February 22, 1994
CATERPILLAR FINANCIAL SERVICES CORPORATION
Medium Term Notes, Series E
With Maturities of 9 Months or More from Date of Issue
(Indexed)
____________________________
Principal Amount: U.S. $18,000,000. See "Description of
Indexed Notes-Principal Repayment
Amount" below.
Maturity Date: March 23, 1995.
Original Issue Date: February 23, 1994.
Interest Payment Date: The Maturity Date.
Interest Rate: 7.00%.
Redemption: The Notes offered hereby (the "Indexed
Notes") cannot be redeemed prior to the
Maturity Date.
Principal Repayment See "Description of Indexed Notes--
Amount: Principal Repayment Amount" below.
Determination Agent: Goldman, Sachs & Co.
Form of Note: Global Note.
Issue Price
(expressed as
a percentage
of aggregate
principal amount): 100%
GOLDMAN, SACHS & CO.
DESCRIPTION OF INDEXED NOTES
The Indexed Notes are speculative in nature and involve
a high degree of risk, including the risk that the Principal
Repayment Amount may be zero. Investors should therefore be
prepared to sustain a total loss of the purchase price of the
Indexed Notes. For further information see "Exchange Rates"
herein and "Foreign Currency Risks" in the Prospectus Supplement.
As described herein, the exchange rate of the Japanese
Yen relative to the Australian Dollar will determine the
Principal Repayment Amount, if any, payable at Maturity. See
"Exchange Rates" herein. On February 10, 1994, the exchange rate
of the Japanese Yen to the Australian Dollar was 78.00, as
determined by the Determination Agent. For further information
as to the relative exchange rate of the Japanese Yen to the
Australian Dollar, and certain financial and tax consequences to
holders of the Indexed Notes, see "Exchange Rates" and "Certain
United States Federal Income Tax Consequences" herein. For a
discussion of certain exchange rate risks related to foreign
currency-related notes such as the Indexed Notes, see "Foreign
Currency Risks" in the Prospectus Supplement and "Exchange Rates"
herein. In this Pricing Supplement, references to "Australian
Dollars", "A$" and "AUD" are to the currency of Australia,
references to "Japanese Yen" and "JPY" are to the currency of
Japan and references to "U.S. Dollars" and "U.S.$" are to the
currency of the United States.
General
The following description of the particular terms of
the Indexed Notes supplements, and to the extent inconsistent
therewith replaces, the description of the general terms and
provisions of the Notes set forth in the accompanying Prospectus
Supplement and the description of Debt Securities set forth in
the accompanying Prospectus, to which descriptions reference is
hereby made. All terms used herein but not otherwise defined
herein and which are defined in the accompanying Prospectus or
Prospectus Supplement shall have the meanings therein assigned to
them. With respect to the Indexed Notes, references to the
principal amount of Debt Securities in the Prospectus shall be
deemed to refer to the Principal Amount of the Indexed Notes,
except in connection with references to the amount to be paid at
Maturity, which shall be deemed to refer to the Principal
Repayment Amount, calculated as described herein. This Pricing
Supplement may be used only with the Prospectus and Prospectus
Supplement.
The Indexed Notes will be issued as Global Notes in
denominations of U.S. $100,000 and any integral multiple of
U.S. $1,000 in excess thereof. The CUSIP number used to
identify the Indexed Notes is 14912LMVO.
Principal Repayment Amount
The amount of principal payable in U.S. Dollars at
Maturity (the "Principal Repayment Amount") shall equal the
Principal Amount plus the Redemption Amount; provided, however,
that in no event may the Principal Repayment Amount be less than
zero.
The "Redemption Amount" shall equal the Principal
Amount multiplied by the following number:
( )
2 x ( (Ending JPY/AUD Rate) -1 )
( (Beginning JPY/AUD Rate) )
( )
where "Beginning JPY/AUD Rate" means 78.00 and "Ending JPY/AUD
Rate" means the Determination Agent's spot bid for Australian
Dollar/spot offer for Japanese Yen as quoted in Japanese Yen per
one Australian Dollar by the Determination Agent at
approximately 10:00 a.m., New York time, two New York, Tokyo and
Sydney Banking Days prior to Maturity (the "Determination Date").
If the Determination Date is not a New York, Tokyo and Sydney
Banking Day, then the Ending JPY/AUD Rate shall be determined on
the preceding New York, Tokyo and Sydney Banking Day. "Banking
Day" means, in respect of any city, any day on which commercial
banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in that city.
The Company has irrevocably appointed Goldman, Sachs &
Co. as agent (the "Determination Agent") for the purposes of
making the determination of the Ending JPY/AUD Rate. If any then
acting Determination Agent shall be unable to act as such, the
Company will appoint another agent to act as Determination Agent;
provided that such replacement Determination Agent shall be a
major U.S. money center bank with its principal offices in New
York City.
All determinations made by the Determination Agent
shall be at its sole discretion and shall, absent manifest error,
be conclusive for all purposes and binding on the Company and the
holders of the Indexed Notes.
Interest
The Indexed Notes will bear interest based on the
Principal Amount of the Indexed Notes from and including the
Original Issue Date at the annual Interest Rate set forth on the
cover page of this Pricing Supplement. Interest will be payable
on the Maturity Date and to the persons to whom the Principal
Repayment Amount is payable. Interest will be computed on the
basis of the actual number of days elapsed divided by 365.
Payment of Principal Repayment Amount and Interest
Payment of the Principal Repayment Amount, if any, and
interest on the Indexed Notes will be made in U.S. Dollars on the
Maturity Date; provided that if the Maturity Date would otherwise
be a day that is not a Business Day, the Maturity Date will be
the first following day that is a Business Day.
Events of Default
The amount of principal due and payable upon
acceleration
of the Indexed Notes shall be the Principal Repayment Amount
calculated as described above under "Principal Repayment Amount";
provided, however, that in such event the amount of principal due
on and after the date such acceleration is declared shall be
calculated with reference to the applicable forward JPY/AUD
exchange rate of the Determination Agent as of 10:00 a.m., New
York
City time, on the acceleration date for settlement on the
Maturity
Date, discounted to the present value as of such acceleration
date
at commercially reasonably U.S. Dollar interest rates as
determined
by the Determination Agent.
EXCHANGE RATES
Purchasers of the Indexed Notes will receive a
Principal
Repayment Amount, if any, that will be affected by changes in the
rate of exchange of the Japanese Yen relative to the Australian
Dollar. Such changes may be significant. The aggregate
Principal
Repayment Amount of the Indexed Notes at Maturity may be equal
to,
greater than, or less than (to a minimum of zero) the U.S.
$18,000,000 Principal Amount of the Indexed Notes. The actual
Principal Repayment Amount of the Indexed Notes will be
determined
by adjusting the Principal Amount of the Indexed Notes by the
formula set forth under "Principal Repayment Amount" and will
depend on the exchange rate of the Japanese Yen relative to the
Australian Dollar as of the Determination Date.
The JPY/AUD exchange rate is a function of the supply
of and the demand for the applicable currencies. Changes in the
exchange rate over time result from the interaction of many
factors, including rates of inflation, interest rate levels,
commodity prices, the balance of payments and the extent of
governmental surpluses or deficits in Japan and Australia. All
such factors are sensitive to the monetary, fiscal and trade
policies pursued by the governments of each of these countries,
as well as of other countries important to international trade
and finance. The imposition or modification of foreign exchange
controls by Japan or Australia also could affect exchange rates.
For a discussion of certain exchange rate risks related to
foreign currency-related Notes such as the Indexed Notes, see
also "Foreign Currency Risks" in the Prospectus Supplement.
The following table illustrates the Principal Repayment
Amount (excluding interest) per U.S. $1,000 Principal Amount of
Indexed Notes that would be payable on the Maturity Date if the
Ending JPY/AUD Rates set forth below were in effect on the
Determination Date and were used to calculate the Principal
Repayment Amount on the Maturity Date.
Principal Redemption
Amount (excluding
Ending interest) per U.S.
JPY/AUD $1,000
Rate Principal Amount
100.00 $1,564.10
89.00 $1,282.05
*78.00 $1,000.00
67.00 $717.95
56.00 $435.90
____________________
*Beginning JPY/AUD Rate
The above figures are for purposes of illustration
only. The actual amount received at the Maturity Date will
depend upon the JPY/AUD exchange rate in effect on the
Determination Date compared to that prevailing on February 10,
1994. Historical data regarding the JPY/AUD exchange rate is set
forth below.
Historical Data
The following table sets forth the exchange rates for
Japanese Yen to Australian Dollars for the first business day of
the months specified below. These rates are calculated by
dividing the noon buying rate in the City of New York for cable
transfers of the Japanese Yen for one U.S. Dollar by the noon
buying rate in the City of New York for cable transfers of the
Australian Dollar for one U.S. Dollar, each as certified by the
Federal Reserve Bank of New York. The Principal Repayment Amount
will be based upon the quoted rates of the Determination Agent on
the Determination Date as set forth above under "Principal
Repayment Amount", which may vary from the rates calculated in
accordance with the preceding sentence. In addition,
fluctuations in exchange rates that have occurred in the past are
not necessarily indicative of fluctuations that may occur in the
future, which may be greater or less than those that have
occurred historically.
JPY/AUD
First Business Exchange
Day of Month Rate
January 1990 . . . . . . . . . . . . . . 114.88
February 1990. . . . . . . . . . . . . . 111.60
March 1990 . . . . . . . . . . . . . . . 114.27
April 1990 . . . . . . . . . . . . . . . 120.14
May 1990 . . . . . . . . . . . . . . . . 118.45
June 1990. . . . . . . . . . . . . . . . 116.46
July 1990. . . . . . . . . . . . . . . . 120.52
August 1990. . . . . . . . . . . . . . . 116.92
September 1990 . . . . . . . . . . . . . 116.95
October 1990 . . . . . . . . . . . . . . 113.78
November 1990. . . . . . . . . . . . . . 102.26
December 1990. . . . . . . . . . . . . . 104.40
January 1991 . . . . . . . . . . . . . . 104.11
February 1991. . . . . . . . . . . . . . 102.79
March 1991 . . . . . . . . . . . . . . . 105.60
April 1991 . . . . . . . . . . . . . . . 108.66
May 1991 . . . . . . . . . . . . . . . . 107.16
June 1991. . . . . . . . . . . . . . . . 105.35
July 1991. . . . . . . . . . . . . . . . 105.89
August 1991. . . . . . . . . . . . . . . 106.90
September 1991 . . . . . . . . . . . . . 105.84
October 1991 . . . . . . . . . . . . . . 106.17
November 1991. . . . . . . . . . . . . . 101.76
December 1991. . . . . . . . . . . . . . 101.88
January 1992 . . . . . . . . . . . . . . 94.18
February 1992. . . . . . . . . . . . . . 94.76
March 1992 . . . . . . . . . . . . . . . 97.81
April 1992 . . . . . . . . . . . . . . . 103.11
May 1992 . . . . . . . . . . . . . . . . 100.29
June 1992. . . . . . . . . . . . . . . . 96.53
July 1992. . . . . . . . . . . . . . . . 93.30
August 1992. . . . . . . . . . . . . . . 94.68
September 1992 . . . . . . . . . . . . . 88.20
October 1992 . . . . . . . . . . . . . . 85.69
November 1992. . . . . . . . . . . . . . 85.65
December 1992. . . . . . . . . . . . . . 85.13
January 1993 . . . . . . . . . . . . . . 85.50
February 1993. . . . . . . . . . . . . . 84.40
March 1993 . . . . . . . . . . . . . . . 83.74
April 1993 . . . . . . . . . . . . . . . 79.53
May 1993 . . . . . . . . . . . . . . . . 78.31
June 1993. . . . . . . . . . . . . . . . 72.59
July 1993. . . . . . . . . . . . . . . . 71.86
August 1993. . . . . . . . . . . . . . . 71.95
September 1993 . . . . . . . . . . . . . 70.61
October 1993 . . . . . . . . . . . . . . 68.67
November 1993. . . . . . . . . . . . . . 72.98
December 1993. . . . . . . . . . . . . . 71.52
January 1994 . . . . . . . . . . . . . . 76.95
February 1994. . . . . . . . . . . . . . 77.42<PAGE>
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN
INVESTMENT IN THE INDEXED NOTES. SUCH INDEXED NOTES ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY INDEXED SECURITIES.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States
federal income tax consequences of an investment in the Indexed
Notes as of the date hereof. This summary supplements, and to
the extent inconsistent therewith replaces, the discussion of
United States federal income taxation set forth in the Prospectus
Supplement under the heading "Certain United States Federal
Income Tax Consequences." The summary is addressed only to
original purchasers of the Indexed Notes who are "United States
persons" (as defined in Code Section 7701(a)(30)) and deals only
with Indexed Notes held as capital assets within the meaning of
Section 1221 of the Code and does not address tax consequences of
holding the Indexed Notes that may be relevant to investors in
special tax situations, such as certain financial institutions,
tax-exempt organizations, life insurance companies, dealers in
securities or currencies, holders whose "functional currency", as
defined in Code Section 985, is not the United States dollar
("nonfunctional currency"), or investors holding the Indexed
Notes as part of a conversion transaction, as part of a hedged or
hedging transaction, or as a position in a straddle for tax
purposes. Persons considering the purchase of Indexed Notes
should consult their own tax advisors concerning the application
of United States federal income tax laws, as well as the laws of
any state, local or foreign taxing jurisdictions to their
particular situations.
The Indexed Notes will be subject to special United
States federal income tax rules discussed in the Prospectus
Supplement applicable to foreign currency transactions and may be
subject to proposed regulations concerning the treatment of
contingent payment obligations. It is unclear how they would
apply to the Indexed Notes. In addition, the Internal Revenue
Service may promulgate further proposed or final regulations
concerning the treatment of contingent payment obligations or
obligations with payments determined by reference to foreign
currencies (such as the Indexed Notes) or concerning the
application of the original issue discount rules to obligations
having such characteristics. It is not possible to predict how
any such future regulations might affect the Indexed Notes or
whether any such future regulations would apply to Indexed Notes
outstanding prior to their promulgation. In any event, the
Company intends to follow all controlling authorities (including
any final Treasury Regulations) that address the proper treatment
for United States federal income tax purposes of the Indexed
Notes. ACCORDINGLY, EACH PROSPECTIVE PURCHASER OF INDEXED NOTES
SHOULD CONSULT THEIR OWN TAX ADVISOR WITH RESPECT TO THE TAX
CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF
SUCH NOTES.
No authority exists that directly addresses securities
having characteristics similar to those of the Indexed Notes.
Although the Company intends to treat the Indexed Notes as debt
obligations of the Company for federal income tax purposes, the
Internal Revenue Service may successfully assert that the Indexed
Notes should be treated as creating, in whole or in part, a
forward contract or other financial instrument. The Company
intends to satisfy its reporting obligations by treating each
Indexed Note as having been issued at an original issue discount
for United States federal income tax purposes in an amount equal
to the interest payment payable at maturity. Holders of the
Indexed Notes would be required to include the original issue
discount in gross income for United States federal income tax
purposes as it accrues, in accordance with a constant interest
method based on a compounding of interest, in advance of receipt
of the cash payment attributable to such income. Under this
method, holders of the Indexed Notes (i) would be required to
include in income increasingly greater amounts of original issue
discount in successive accrual periods, and (ii) would not
include the payment of stated interest on the Indexed Notes in
income in accordance with the holder's regular method of
accounting for tax purposes.
At maturity, holders of the Indexed Notes would
generally recognize gain (or loss) if the Principal Repayment
Amount exceeds (or is less than) the stated principal amount of
such Indexed Notes. Although the treatment of such gain or loss
is unclear, such difference should constitute an ordinary gain
(or loss), unless a special election permitting capital gain or
loss treatment is permitted and made by the holder. The Internal
Revenue Service may contend, however, that a loss recognized at
maturity should be treated as a capital loss, not an ordinary
loss.
Potential investors should note that the Internal
Revenue Service may assert that the Indexed Notes should be
characterized in whole or in part as a forward contract or other
financial instrument. Such recharacterization could change
substantially the United States federal income tax treatment of
the Indexed Notes.
<PAGE>
IN VIEW OF THE UNCERTAINTY OF THE INCOME TAX
CONSEQUENCES OF AN INVESTMENT IN THE INDEXED NOTES, PERSONS
CONSIDERING THE PURCHASE OF INDEXED NOTES SHOULD CONSULT THEIR
OWN TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF THE
ACQUISITION, OWNERSHIP AND DISPOSITION OF INDEXED NOTES,
INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL AND
FOREIGN TAX LAWS.
_______________________________
Pricing Supplement to Prospectus Supplement dated August 27, 1993
and Prospectus dated August 19, 1993
