<PAGE> 1
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 8, 2000
$500,000,000
CATERPILLAR FINANCIAL SERVICES CORPORATION
POWERNOTES(SM)
WITH MATURITIES OF 9 MONTHS OR MORE FROM DATE OF ISSUE
We plan to offer and sell notes with various terms, which may include the
following:
- Maturity of 9 months or more from the date of issue
- Interest at a fixed rate
- Interest payment dates at monthly, quarterly, semi-annual or annual
intervals
- Book-entry (through The Depository Trust Company) form
- Minimum denominations of U.S. $1,000 increased in multiples of $1,000
- Redemption and/or repayment provisions, if applicable, whether mandatory
or at our option or the option of the holder
We will specify the final terms for each note, which may be different from
the terms described in this prospectus supplement, in the applicable pricing
supplement.
You must pay for the notes by delivering the purchase price to an agent,
unless you make other payment arrangements.
INVESTING IN THE NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON PAGE S-5.
---------------------
We may sell notes to the agents as principal for resale at varying or fixed
offering prices or through the agents as agent on our behalf. If we sell all of
the notes, we expect to receive proceeds from such sales of between $475,000,000
and $497,000,000, after paying the agents' discounts and commissions of between
$3,000,000 and $25,000,000. However, the agents' discounts and commissions may
exceed these amounts with respect to sales of notes with stated maturities in
excess of 30 years. We may also sell notes without the assistance of the agents
(whether acting as principal or as agent). Out of our proceeds, we expect to
incur approximately $320,000 in expenses.
(SM)Service Mark of Caterpillar Financial Services Corporation
---------------------
These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have these organizations
determined that this prospectus supplement, the prospectus or any pricing
supplement is accurate or complete. Any representation to the contrary is a
criminal offense.
ABN AMRO INCORPORATED
CHARLES SCHWAB & CO., INC.
EDWARD JONES & CO., L.P.
FIDELITY CAPITAL MARKETS
A DIVISION OF
NATIONAL FINANCIAL
SERVICES CORPORATION
PAINEWEBBER INCORPORATED
SALOMON SMITH BARNEY
---------------------
SEPTEMBER 8, 2000
<PAGE> 2
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... S-3
About This Prospectus Supplement And Pricing Supplements.... S-5
Risk Factors................................................ S-5
Structure and Market Risks................................ S-5
Description Of Notes........................................ S-6
General Features of the Notes............................. S-6
Payment of Principal and Interest......................... S-7
Other Provisions Applicable to Notes...................... S-8
Book-Entry System......................................... S-8
Redemption and Repurchase................................. S-10
Repayment at Option of Holder............................. S-11
Repayment Upon Death...................................... S-11
Certain United States Federal Income Tax Consequences....... S-14
United States Holders..................................... S-14
Non-United States Holders................................. S-19
Supplemental Plan Of Distribution........................... S-21
Validity of Notes........................................... S-22
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Caterpillar Financial Services Corporation.................. 3
Use of Proceeds............................................. 3
Ratios of Profit to Fixed Charges........................... 3
Description of Debt Securities We May Offer................. 3
Plan of Distribution........................................ 9
Validity of Debt Securities We May Offer.................... 10
Experts..................................................... 10
Where You Can Find More Information......................... 10
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING SUPPLEMENT. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED
IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING
SUPPLEMENT. WE ARE OFFERING TO SELL THE NOTES, AND SEEKING OFFERS TO BUY THE
NOTES, ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS
AND ANY PRICING SUPPLEMENT IS ACCURATE ONLY AS OF THEIR RESPECTIVE DATES,
REGARDLESS OF THE TIME OF THEIR DELIVERY OR ANY SALE OF THE NOTES.
S-2
<PAGE> 3
SUMMARY
You should read the more detailed information appearing elsewhere in this
prospectus supplement, the accompanying prospectus and the applicable pricing
supplement.
Issuer........................ Caterpillar Financial Services Corporation
Purchasing Agent.............. ABN AMRO Incorporated
Title......................... PowerNotes(SM)
Amount........................ Up to $500,000,000 aggregate initial public
offering price.
Denomination.................. The authorized denominations of the notes will
be $1,000 and any amount in excess thereof that
is an integral multiple of $1,000.
Status........................ The notes are unsecured and unsubordinated
obligations of Caterpillar Financial and will
rate equally and ratably with all other
unsecured and unsubordinated indebtedness of
Caterpillar Financial.
Maturities.................... Due from nine months or more from the date of
issue, as specified in the applicable pricing
supplement.
Interest...................... - Each note will bear interest from the issue
date at a fixed rate, which may be zero in
the case of a zero-coupon note.
- Interest on each note, other than a
zero-coupon note, will be payable either
monthly, quarterly, semi-annually or annually
on each interest payment date and on the
maturity date; and
- Unless otherwise specified in the applicable
pricing supplement, interest on the notes
will be computed on the basis of a 360-day
year of twelve 30-day months.
Principal..................... The principal amount of the notes will be
payable on the maturity date of such notes at
the corporate trust office of the trustee.
Redemption and Repayment...... Unless otherwise provided in the applicable
pricing supplement:
- the notes will not be redeemable prior to the
maturity date at the option of Caterpillar
Financial or repayable prior to the maturity
date at the option of the holder; and
- the notes will not be subject to any sinking
fund. The pricing supplement relating to any
note will indicate whether the holder of such
note will have the right to require
Caterpillar Financial to repay a note prior
to its maturity date upon the death of the
owner of such note.
S-3
<PAGE> 4
Form of Notes and Clearance... The notes will be represented by global notes
deposited with or on behalf of the depositary,
The Depository Trust Company, and registered in
the name of the depositary's nominee. Global
notes will be exchangeable for definitive notes
only in limited circumstances. See "Description
of Notes -- Book-Entry System."
Trustee....................... U.S. Bank Trust National Association, Corporate
Trust Department, 450 West 33rd Street, 16th
Floor, New York, New York 10005, under an
indenture dated as of April 15, 1985, as
supplemented from time to time.
Selling Group Members......... Broker-dealers and/or securities firms that
have executed dealer agreements with the
purchasing agent and have agreed to market and
sell the notes in accordance with the terms of
these agreements along with all other
applicable laws and regulations. You may call
1-877-373-0322 for a list of selling group
members or access the internet at
www.catpowernotes.com.
S-4
<PAGE> 5
ABOUT THIS PROSPECTUS SUPPLEMENT
AND PRICING SUPPLEMENTS
This prospectus supplement sets forth certain terms of the PowerNotes (the
"notes"), that we may offer and supplements the prospectus that is attached to
the back of this prospectus supplement. This prospectus supplement supersedes
the prospectus to the extent it contains information that is different from the
information in the prospectus.
Each time we offer notes, we will attach a pricing supplement to this
prospectus supplement. The pricing supplement will contain the specific
description of the notes we are offering and the terms of the offering. The
pricing supplement will supersede this prospectus supplement or the prospectus
to the extent it contains information that is different from the information
contained in this prospectus supplement or the prospectus.
It is important for you to read and consider all information contained in
this prospectus supplement and the accompanying prospectus and pricing
supplement in making your investment decision. You should also read and consider
the information contained in the documents identified in "Where You Can Find
More Information" in the prospectus.
In this prospectus supplement, the terms "Caterpillar Financial," "we,"
"us" and "our" mean Caterpillar Financial Services Corporation and its wholly
owned subsidiaries.
RISK FACTORS
Your investment in the notes will involve certain risks. This prospectus
supplement does not describe all of those risks. Neither we nor the agents will
be responsible for advising you of these risks now or as they may change in the
future.
In consultation with your own financial and legal advisors, you should
carefully consider, among other matters, the following discussion of risks
before deciding whether an investment in the notes is suitable for you. The
notes are not an appropriate investment for you if you are unsophisticated with
respect to the significant elements of the notes or financial matters.
STRUCTURE AND MARKET RISKS
Redemption -- We may choose to redeem notes when prevailing interest rates
are relatively low.
If your notes are redeemable, we may choose to redeem your notes from time
to time. In the event that prevailing interest rates are relatively low, you
would not be able to reinvest the redemption proceeds in a comparable security
at an effective interest rate as high as the interest rate on the notes being
redeemed.
Uncertain Trading Markets -- We cannot assure that a trading market for
your notes will ever develop or be maintained.
We cannot assure you that a trading market for your notes will ever develop
or be maintained. Many factors independent of our creditworthiness affect the
trading market and market value of your notes. These factors include:
- the method of calculating the principal and interest for the notes;
- the time remaining to the maturity of the notes;
- the outstanding amount of the notes;
- the redemption features of the notes; and
- the level, direction and volatility of market interest rates generally.
There may be a limited number of buyers when you decide to sell your notes.
This may affect the price you receive for your notes or your ability to sell
your notes at all. You should not purchase notes unless you understand and know
you can bear the foregoing investment risks.
S-5
<PAGE> 6
DESCRIPTION OF NOTES
The notes we are offering by this prospectus supplement constitute a series
of debt securities for purposes of the indenture dated as of April 15, 1985, as
supplemented from time to time. The notes will be on a parity in all respects
with all debt securities issued under the indenture. For a description of the
indenture and the rights of the holders of securities under the indenture,
including the notes, see "Description of Debt Securities We May Offer" in the
accompanying prospectus attached to this prospectus supplement.
The following description of the particular terms of the notes we are
offering supplements, and to the extent inconsistent replaces, the description
of the general terms and provisions of debt securities described in the
accompanying prospectus, and we refer you to that description. The terms and
conditions described in this section "Description of Notes" will apply to each
note unless we otherwise specify in the applicable pricing supplement. Certain
terms used in this prospectus supplement have the meanings given to those terms
in the prospectus.
GENERAL FEATURES OF THE NOTES
The notes will be unsecured obligations of Caterpillar Financial and will
be issued only in the form of one or more global securities registered in the
name of a nominee of The Depository Trust Company, as depositary, except as
specified in "Book-Entry System" below. As used in this prospectus supplement,
the term "holder" means those who own notes registered in their own names and
not those who own beneficial interests in notes issued in "book-entry" form
through the depository. For more information on certificated and global notes,
see "Book-Entry System" below.
We may offer from time to time up to $500,000,000 aggregate principal
amount, including in such amount the offering price of any such notes sold at a
discount. However, we may increase this limit, if in the future we determine
that we may wish to sell additional notes.
The notes will be offered on a continuous basis and will mature nine months
or more from the date of issue, as selected by the initial purchaser and agreed
to by us.
The notes may be issued as original issue discount notes. An original issue
discount note is a note, including any zero-coupon note, which is issued at a
price lower than its principal amount and provides that, upon redemption or
acceleration of its maturity, an amount less than its principal amount will be
payable. For additional information regarding payments upon acceleration of the
maturity of an original issue discount note and regarding the United States
federal tax considerations of original issue discount notes, see "Payment of
Principal and Interest" and "Certain United States Federal Income Tax
Consequences -- United States Holders -- Original Issue Discount." Original
issue discount notes will be treated as original issue discount securities for
purposes of the indenture.
The notes may be registered for transfer or exchanged at the principal
office of the Corporate Trust Department of U.S. Bank Trust National Association
(formerly First Trust of New York, National Association) (the "trustee") in The
City of New York. The transfer or exchange of global notes will be effected as
specified in "Book-Entry System" below.
Except as described in "Certain Restrictions -- Restrictions on Liens and
Encumbrances" in the accompanying prospectus, the indenture does not contain any
provision which will restrict us from incurring, assuming or becoming liable
with respect to any indebtedness or other obligations. In addition, although the
support agreement between Caterpillar Inc. and us does provide that Caterpillar
Inc. will ensure that we will maintain a tangible net worth of at least $20
million and will maintain a ratio of earnings
S-6
<PAGE> 7
and interest expense to interest expense of not less than 1.15 to 1, the
indenture does not contain any provision which would afford holders of the notes
other protection upon the occurrence of a highly leveraged transaction involving
Caterpillar Financial which may adversely affect the creditworthiness of the
notes. See "Description of Debt Securities We May Offer -- Certain Restrictions"
in the accompanying prospectus.
As used in this prospectus supplement, business day means, with respect to
any note, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which commercial banks are authorized or required by law,
regulation or executive order to close in The City of New York.
PAYMENT OF PRINCIPAL AND INTEREST
Payments of principal and interest, if any, at maturity will be made in
immediately available funds, provided that the note is presented to the trustee
in time for the trustee to make the payments in such funds in accordance with
its normal procedures. Payments of interest, other than interest payable at
maturity, with respect to global notes will be paid in immediately available
funds to the depositary or its nominee. The depositary will allocate payments
relating to a global note and make payments to the owners or holders of the
global notes in accordance with its existing operating procedures. Neither we
nor the trustee shall have any responsibility or liability for these payments by
the depositary. So long as the depositary or its nominee is the registered owner
of any global note, the depositary or its nominee will be considered the sole
owner or holder of such note for all purposes under the indenture.
Payments of interest, if any, with respect to any certificated note, other
than amounts payable at maturity will be paid by check mailed to the address of
the person entitled to the payments as it appears in the security register.
Unless we otherwise specify in the applicable pricing supplement, if we
redeem any original issue discount note as described below under "Redemption and
Repurchase," or we repay any such note at the option of the holder as described
below under "Repayment at Option of Holder" and "Repayment Upon Death," or if
the principal of any such note is declared to be due and payable immediately as
described in the accompanying prospectus under "Description of Debt Securities
We May Offer -- Events of Default and Notices," the amount of principal due and
payable with respect to such note shall be limited to the sum of the aggregate
principal amount of such note multiplied by the issue price, expressed as a
percentage of the aggregate principal amount, plus the original issue discount
accrued from the date of issue to the date of redemption, repayment or
declaration, as applicable, which accrual shall be calculated using the
"interest method," computed in accordance with generally accepted accounting
principles, in effect on the date of redemption, repayment or declaration, as
applicable.
Each note, other than a zero-coupon note, will bear interest from and
including the date of issue, or in the case of notes issued upon registration of
transfer or exchange from and including the most recent interest payment date to
which interest on such note has been paid or duly provided for. Such interest
will be payable at the fixed rate per annum stated in such note and in the
applicable pricing supplement until the principal of such note is paid or made
available for payment. Interest will be payable on each interest payment date
and at maturity. Interest will be payable to the person in whose name a note is
registered at the close of business on the regular record date next preceding
each interest payment date; provided, however, that interest payable at maturity
will be payable to the person to whom principal shall be payable. The first
payment of interest on any note originally issued
S-7
<PAGE> 8
between a regular record date and an interest payment date will be made on the
interest payment date following the next succeeding regular record date to the
registered owner of such note on such next succeeding regular record date. If
the interest payment date or the maturity for any note falls on a day that is
not a business day, the payment of principal and interest may be made on the
next succeeding business day, and no interest on such payment shall accrue for
the period from and after such interest payment date or maturity, as the case
may be. Unless we otherwise specify in the applicable pricing supplement,
interest on the notes will be computed on the basis of a 360-day year of twelve
30-day months.
The interest payment dates for a note that provides for interest payments
shall be as follows:
<TABLE>
<S> <C>
Interest Payments Interest Payments Dates
Monthly................. Fifteenth day of each calendar
month (or the next business
day), commencing in the first
succeeding calendar month
following the month in which
the note is issued.
Quarterly............... Fifteenth day of every third
month (or the next business
day), commencing in the third
succeeding calendar month
following the month in which
the note is issued.
Semi-annual............. Fifteenth day of every sixth
month (or the next business
day), commencing in the sixth
succeeding calendar month
following the month in which
the note is issued.
Annual.................. Fifteenth day of every twelfth
month (or the next business
day), commencing in the twelfth
succeeding calendar month
following the month in which
the note is issued.
</TABLE>
The regular record date with respect to any interest payment date shall be
the date 15 calendar days prior to such interest payment date, whether or not
such date shall be a business day.
Interest rates we offer on the notes may differ depending upon, among other
things, the aggregate principal amount of notes purchased in any single
transaction. Interest rates and other variable terms of the notes are subject to
change by us from time to time, but no such change will affect any note already
issued or as to which an offer to purchase has been accepted by us.
OTHER PROVISIONS APPLICABLE TO NOTES
Any provisions with respect to the notes, including the determination
and/or specification of the interest payment dates, the maturity or any other
matter relating to such note, may be modified by the terms specified under
"Other Terms" on the face of the note or in an addendum relating to such note,
if so specified on the face of the note and in the applicable pricing
supplement.
BOOK-ENTRY SYSTEM
Upon issuance, all notes having the same original issuance date, interest
rate and stated maturity and other terms, if any, will be represented by a
single global note. Each global note will be deposited with, or on behalf of the
depositary, The Depository Trust Company, New York, New York, and registered in
the name of the depositary's nominee. Except as described below, global notes
may be transferred, in whole and not in part, only by the depositary to a
S-8
<PAGE> 9
nominee of the depositary or by a nominee of the depositary to the depositary or
another nominee of the depositary.
The depositary has advised the agents and us as follows: the depositary 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 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 deposit
with the depositary. The depositary also facilitates the settlement among
participants ("participants") of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, 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 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 notes under 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 notes, each called a 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 notes 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 notes, except as described below.
To facilitate subsequent transfers, all global notes deposited by
participants with the depositary are registered in the name of the depositary's
partnership nominee, Cede & Co. The deposit of global notes 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 notes; the depositary's records reflect only the
identity of the direct participants to whose accounts interests in the global
notes 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.
Redemption notices shall be sent to Cede & Co. If less than all of the
interests in a global note are being redeemed, the depositary's practice is to
S-9
<PAGE> 10
determine by lot the amount of the interest of each direct participant in such
global note to be redeemed.
Neither the depositary nor Cede & Co. will consent or vote with respect to
the global notes. 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 notes are credited on the record date
(identified in a listing attached to the omnibus proxy).
Principal and interest payments on the global notes 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 trustee or us, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to the depositary is the responsibility of us or the
trustee, 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 notes represented by one or more global notes are exchangeable for
certificated notes of like tenor as such notes if:
- the depositary for such global notes notifies us 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 under the Securities
Exchange Act of 1934, as amended,
- we in our discretion at any time determine not to have all of the notes of
such series represented by one or more global note or notes and notify the
trustee of such determination, or
- an event of default, as described in the accompanying prospectus, has occurred
and is continuing with respect to the notes of such series.
Any note that is exchangeable pursuant to the preceding sentence is exchangeable
for certificated notes issuable in authorized denominations and registered in
such names as the depositary holding such global notes shall direct. The
authorized denominations of the notes will be $1,000 or any greater amount that
is an integral multiple of $1,000. Subject to the foregoing, a global note is
not exchangeable, except for a global note or global notes of the same aggregate
denominations 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 we believe to
be reliable, but we take no responsibility for the accuracy of such information.
REDEMPTION AND REPURCHASE
If we indicate in the pricing supplement relating to a note, such note will
be redeemable at our option on a date or dates specified prior to the stated
maturity at a price or prices described in the applicable pricing supplement,
together with accrued interest to the date of redemption. The notes will not be
subject to any sinking fund. We may redeem any of the notes which are redeemable
and remain outstanding either in whole or from time to time in part, upon not
less than 30 nor more than 60 days' notice.
S-10
<PAGE> 11
We may at any time purchase notes at any price in the open market or
otherwise. Notes we purchase in this manner may, at our discretion, be held,
resold or surrendered to the trustee for cancellation.
REPAYMENT AT OPTION OF HOLDER
If we indicate in the pricing supplement relating to a note, such note will
be repayable at the option of the holder on a date or dates specified prior to
the stated maturity at a price or prices described in the applicable pricing
supplement, together with accrued interest to the date of repayment.
In order for a note to be repaid, the trustee must receive at the principal
office of the Corporate Trust Department of the trustee in The City of New York
at least 30 days, but not more than 45 days, prior to the specified repayment
date notice of the holder's exercise of its repayment option as specified in the
note. Exercise of the repayment option by the holder of a note shall be
irrevocable. The repayment option may be exercised by the holder of a note for
less than the entire principal amount of the note provided that the principal
amount of the note remaining outstanding after repayment, if any, is an
authorized denomination.
The depositary or its nominee will be the holder of global notes and
therefore will be the only entity that can exercise a right to repayment with
respect to such notes. In order to ensure that the depositary or its nominee
will timely exercise a right to repayment with respect to a particular global
note, the beneficial owner of such note must instruct the broker or other direct
or indirect participant through which it holds an interest in such note to
notify the depositary of its desire to exercise a right to repayment. Different
firms have different cut-off times for accepting instructions from their
customers and, accordingly, each beneficial owner should consult the broker or
other direct or indirect participant through which it holds an interest in a
note in order to ascertain the cut-off time by which such an instruction must be
given in order for timely notice to be delivered to the depositary.
REPAYMENT UPON DEATH
The pricing supplement relating to any note will indicate whether the
holder of such note will have the right to require us to repay a Note prior to
its maturity date upon the death of the owner of such note as described below
(the "survivor's option"). See the applicable pricing supplement to determine
whether the survivor's option applies to any particular note.
Pursuant to exercise of the survivor's option, if applicable, we will, at
our option, either repay or purchase any note (or portion thereof) properly
tendered for repayment by or on behalf of the person (the "representative") that
has authority to act on behalf of the deceased owner of the beneficial interest
in such note under the laws of the appropriate jurisdiction (including, without
limitation, the personal representative, executor, surviving joint tenant or
surviving tenant by the entirety of such deceased beneficial owner) at a price
equal to 100% of the principal amount of the beneficial interest of the deceased
owner in such note plus accrued interest to the date of such repayment (or at a
price equal to the amortized face amount for zero-coupon notes on the date of
such repayment), subject to the following limitations. The survivor's option may
not be exercised until 12 months following the date of issue of the applicable
notes. In addition, we may, in our sole discretion, limit the aggregate
principal amount of Notes as to which exercises of the survivor's option will be
accepted in any calendar year (the "annual put limitation") to one percent (1%)
of the outstanding aggregate principal amount of the notes as of the end of the
most recent fiscal year, but not less than $1,000,000 in any such calendar year,
or such greater amount as
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<PAGE> 12
we in our sole discretion may determine for any calendar year, and may limit to
$200,000, or such greater amount as we in our sole discretion may determine for
any calendar year, the aggregate principal amount of notes (or portions thereof)
as to which exercise of the survivor's option will be accepted in such calendar
year with respect to any individual deceased owner of beneficial interests in
such notes (the "individual put limitation"). Moreover, we will not make
principal repayments or purchases pursuant to exercise of the survivor's option
in amounts that are less than $1,000, and, in the event that the limitations
described in the preceding sentence would result in the partial repayment or
repurchase of any note, the principal amount of such note remaining outstanding
after repayment must be at least $1,000 (the minimum authorized denomination of
the notes). Any note (or portion thereof) tendered pursuant to exercise of the
survivor's option may not be withdrawn.
Each note (or portion thereof) that is tendered pursuant to valid exercise
of the survivor's option will be accepted promptly in the order all such notes
are tendered, except for any note (or portion thereof) the acceptance of which
would contravene (i) the annual put limitation, if applied, or (ii) the
individual put limitation, if applied, with respect to the relevant individual
deceased owner of beneficial interests therein. If, as of the end of any
calendar year, the aggregate principal amount of notes (or portions thereof)
that have been accepted pursuant to exercise of the survivor's option during
such year has not exceeded the annual put limitation, if applied, for such year,
any exercise(s) of the survivor's option with respect to notes (or portions
thereof) not accepted during such calendar year because such acceptance would
have contravened the individual put limitation, if applied, with respect to an
individual deceased owner of beneficial interests therein will be accepted in
the order all such notes (or portions thereof) were tendered, to the extent that
any such exercise would not trigger the annual put limitation for such calendar
year. Any note (or portion thereof) accepted for repayment pursuant to exercise
of the survivor's option will be repaid no later than the first interest payment
date that occurs 20 or more calendar days after the date of such acceptance.
Each note (or any portion thereof) tendered for repayment that is not accepted
in any calendar year due to the application of the annual put limitation will be
deemed to be tendered in the following calendar year in the order in which all
such notes (or portions thereof) were originally tendered, unless any such note
(or portion thereof) is withdrawn by the representative for the deceased owner
prior to its repayment. In the event that a note (or any portion thereof)
tendered for repayment pursuant to valid exercise of the survivor's option is
not accepted, the trustee will deliver a notice by first-class mail to the
registered holder thereof at its last known address as indicated in the note
register, that states the reason such note (or portion thereof) has not been
accepted for payment.
Subject to the foregoing, in order for a survivor's option to be validly
exercised with respect to any note (or portion thereof), the trustee must
receive from the representative of the deceased owner:
(1) a written request for repayment signed by the representative, and
such signature must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc. or a commercial bank or trust company having an office or
correspondent in the United States,
(2) tender of the note (or portion thereof) to be repaid,
(3) appropriate evidence satisfactory to the trustee that (a) the
representative has authority to act on behalf of the deceased beneficial
owner, (b) the death of such
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beneficial owner has occurred and (c) the deceased was the owner of a
beneficial interest in such note at the time of death,
(4) if applicable, a properly executed assignment or endorsement, and
(5) if the beneficial interest in such note is held by a nominee of
the deceased beneficial owner, a certificate satisfactory to the trustee
from such nominee attesting to the deceased's ownership of a beneficial
interest in such note.
Subject to our right hereunder to limit the aggregate principal amount of
notes as to which exercises of the survivor's option shall be accepted in any
one calendar year, all questions as to the eligibility or validity of any
exercise of the survivor's option will be determined by the trustee, in its sole
discretion, which determination will be final and binding on all parties. The
trustee will disburse payments it receives pursuant to exercise of the
survivor's option on the interest payment date following the first regular
record date upon which the trustee shall have received the documents described
in clauses (1) through (5) of the preceding paragraph.
The death of a person owning a note in joint tenancy or tenancy by the
entirety with another or others will be deemed the death of the holder of the
note, and the entire principal amount of the note so held will be subject to
repayment, together with interest accrued thereon to the repayment date. The
death of a person owning a note by tenancy in common will be deemed the death of
a holder of a note only with respect to the deceased holder's interest in the
note so held by tenancy in common; except that in the event a note is held by
husband and wife as tenants in common, the death of either will be deemed the
death of the holder of the note, and the entire principal amount of the note so
held will be subject to repayment. The death of a person who, during his or her
lifetime, was entitled to substantially all of the beneficial interests of
ownership of a note, will be deemed the death of the holder thereof for purposes
of this provision, regardless of the registered holder, if such beneficial
interest can be established to the satisfaction of the trustee. Such beneficial
interest will be deemed to exist in typical cases of nominee ownership,
ownership under the Uniform Gifts to Minors Act, community property or other
joint ownership arrangements between a husband and wife and trust arrangements
where one person has substantially all of the beneficial ownership interest in
the note during his or her lifetime.
In the case of repayment pursuant to the exercise of the survivor's option,
for notes represented by a global note, the depositary or its nominee will be
the holder of such note and therefore will be the only entity that can exercise
the survivor's option for such note. To obtain repayment pursuant to exercise of
the survivor's option with respect to such note, the representative must provide
to the broker or other entity through which the beneficial interest in such note
is held by the deceased owner:
(1) the documents described in clauses (1) and (3) of the third
preceding paragraph, and
(2) instructions to such broker or other entity to notify the
depositary of such representative's desire to obtain repayment pursuant to
exercise of the survivor's option.
Such broker or other entity will provide to the trustee:
(1) the documents received from the representative referred to in
clause (1) of the preceding paragraph, and
(2) a certificate satisfactory to the trustee from such broker or
other entity stating that it represents the deceased beneficial owner.
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Such broker or other entity will be responsible for disbursing any payments
it receives pursuant to exercise of the survivor's option to the appropriate
representative. See "Description of Notes -- Book-Entry System."
A representative may obtain the forms used to exercise the survivor's
option from U.S. Bank Trust National Association, the trustee, at 100 Wall
Street, 16th Floor, New York, New York 10005, or call the Corporate Trust
Department at (212) 361-2536, during normal business hours.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Orrick, Herrington & Sutcliffe LLP, our counsel, the
following summary correctly describes certain United States federal income tax
consequences of the ownership of notes as of the date of this prospectus
supplement. This summary is based on the Internal Revenue Code of 1986 as well
as final, temporary and proposed Treasury regulations and administrative and
judicial decisions. Legislative, judicial and administrative changes may occur,
possibly with retroactive effect, that could affect the accuracy of the
statements described in this prospectus supplement. This summary generally is
addressed only to original purchasers of the notes, deals only with notes held
as capital assets and does not purport to address all United States federal
income tax matters that may be relevant to investors in special tax situations,
such as:
- life insurance companies,
- tax-exempt organizations,
- dealers in securities or currencies, or traders in securities that elect to
mark to market,
- notes held as a hedge or as part of a hedging, straddle or conversion
transaction, or
- holders whose functional currency is not the U.S. dollar.
This summary deals only with notes that are due to mature 30 years or less
from the date on which they are issued. The United States federal income tax
consequences of the ownership of notes that are due to mature more than 30 years
from the date of issue will be discussed in the applicable pricing supplement.
Persons considering the purchase of 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 applicable pricing supplement may contain a
discussion of the special United States federal income tax consequences
applicable to particular notes.
UNITED STATES HOLDERS
This section describes the tax consequences to a United States holder. A
United States holder is a beneficial owner of a note that is:
- a citizen or resident of the United States,
- a domestic corporation,
- an estate whose income is subject to United States federal income tax
regardless of its source, or
- a trust if a United States court can exercise primary supervision over the
trust's administration and one or more United States persons are authorized to
control all substantial decisions of the trust.
If you are not a United States holder, this section does not apply to you.
See "Non-United States Holders" below.
Payment of Interest
Except as described below, interest on a note will be taxable to a United
States holder as ordinary interest income at the time it accrues or
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is received, in accordance with the United States holder's method of accounting
for tax purposes. Special rules governing the treatment of notes issued at an
original issue discount are described under "Original Issue Discount" below.
Original Issue Discount
General Treatment. The following is a summary of the principal United
States federal income tax consequences of the ownership of notes issued with
original issue discount. A note that has an issue price of less than its stated
redemption price at maturity generally will be issued with original issue
discount for federal income tax purposes in the amount of such difference. The
issue price of a note generally is the first price at which a substantial amount
of the issue of notes is sold to the public (excluding bond houses, brokers or
similar persons acting in the capacity of underwriters or wholesalers). The
stated redemption price at maturity is the total amount of all payments provided
by the note other than qualified stated interest payments; qualified stated
interest generally is stated interest that is unconditionally payable at least
annually either at a single fixed rate or at certain variable rates. Qualified
stated interest will be taxable to a United States holder when accrued or
received in accordance with the United States holder's method of tax accounting.
A note will be considered to have de minimis original issue discount if the
excess of its stated redemption price at maturity over its issue price is less
than the product of .25 percent of the stated redemption price at maturity and
the number of complete years to maturity (or the weighted average maturity in
the case of a note that provides for payment of an amount other than qualified
stated interest before maturity). United States holders of notes having de
minimis original issue discount generally must include a proportionate amount of
each payment of stated principal in income as a payment received in retirement
of the note.
United States holders of notes issued with original issue discount that is
not de minimis original issue discount and that mature more than one year from
the date of issuance will be required to include such original issue discount in
gross income for federal income tax purposes as it accrues (regardless of such
holder's method of accounting), in advance of receipt of the cash attributable
to such income. Original issue discount accrues based on a compounded, constant
yield to maturity; accordingly, United States holders of notes issued at an
original issue discount will generally be required to include in income
increasingly greater amounts of original issue discount in successive accrual
periods.
The annual amount of original issue discount includable in income by the
initial United States holder of a note issued at an original issue discount will
equal the sum of the daily portions of the original issue discount with respect
to the note for each day on which such holder held the note during the taxable
year. Generally, the daily portions of the original issue discount are
determined by allocating to each day in an accrual period the ratable portion of
the original issue discount allocable to such accrual period. The term accrual
period means an interval of time with respect to which the accrual of original
issue discount is measured, and which may vary in length over the term of the
note provided that each accrual period is no longer than one year and each
scheduled payment of principal or interest occurs on either the first or final
day of an accrual period.
The amount of original issue discount allocable to an accrual period will
be the excess of (i) the product of the adjusted issue price of the note at the
commencement of such accrual period and its yield to maturity over (ii) the
amount of any qualified stated interest payments allocable to
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the accrual period. The adjusted issue price of the note at the beginning of the
first accrual period is its issue price, and, on any day thereafter, it is the
sum of the issue price and the amount of the original issue discount previously
includable in the gross income of any holder (without regard to any acquisition
premium), reduced by the amount of any payment other than a payment of qualified
stated interest previously made with respect to the note. There is a special
rule for determining the original issue discount allocable to an accrual period
if an interval between payments of qualified stated interest contains more than
one accrual period. The yield to maturity of the note is the yield to maturity
computed on the basis of a constant interest rate, compounding at the end of
each accrual period; such constant yield, however, must take into account the
length of the particular accrual period. If all accrual periods are of equal
length except for an initial or an initial and final shorter accrual period(s),
the amount of original issue discount allocable to the initial period may be
computed using any reasonable method; the original issue discount allocable to
the final accrual period is in any event the difference between the amount
payable at maturity (other than a payment of qualified stated interest) and the
adjusted issue price at the beginning of the final accrual period.
If a portion of the initial purchase price of a note is attributable to
pre-issuance accrued interest, the first stated interest payment on the note is
to be made within one year of the note's issue date, and the payment will equal
or exceed the amount of pre-issuance accrued interest, then the United States
holder may elect to decrease the issue price of the note by the amount of
pre-issuance accrued interest. In that event, a portion of the first stated
interest payment will be treated as a return of the excluded pre-issuance
accrued interest and not as an amount payable on the note.
If a note provides for an alternative payment schedule or schedules
applicable upon the occurrence of a contingency or contingencies (other than a
remote or incidental contingency), whether such contingency relates to payments
of interest or of principal, if the timing and amount of the payments that
comprise each payment schedule are known as of the issue date and if one of such
schedules is significantly more likely than not to occur, the yield and maturity
of the note are determined by assuming that the payments will be made according
to that payment schedule. If there is no single payment schedule that is
significantly more likely than not to occur (other than because of a mandatory
sinking fund), the note will be subject to the general rules that govern
contingent payment obligations. These rules will be discussed in the applicable
pricing supplement.
United States holders of notes containing a survivor's option issued with
original issue discount (other than zero coupon notes) should consult with their
tax advisors regarding the effect of such feature to their particular
circumstances.
For purposes of calculating the yield and maturity of a note subject to an
issuer or holder right to accelerate principal repayment (respectively, a call
option or put option), such call option or put option is presumed exercised if
the yield on the note would be less or more, respectively, than it would be if
the option were not exercised. The effect of this rule generally may be to
accelerate or defer the inclusion of original issue discount in the income of a
United States holder whose note is subject to a put option or a call option, as
compared to a note that does not have such an option. If any such option
presumed to be exercised is not in fact exercised, the note is treated as
reissued on the date of presumed exercise for an amount equal to its adjusted
issue price on that date for purposes of redetermining such note's yield and
maturity and
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any related subsequent accruals of original issue discount.
Short-Term Notes. A note that matures one year or less from the date of its
issuance is called a short-term note. In general, an individual or other cash
method United States holder of a short-term note is not required to accrue
original issue discount for federal income tax purposes unless it elects to do
so. United States holders who report income for United States federal income tax
purposes on the accrual method and certain other holders, including banks,
common trust funds, holders who holds the note as part of certain identified
hedging transactions, regulated investment companies and dealers in securities,
are required to include original issue discount on such notes on a straight-line
basis, unless an election is made to accrue the original issue discount
according to a constant interest method based on daily compounding.
In the case of a United States holder who is not required and does not
elect to include original issue discount in income currently, any gain realized
on the sale, exchange or retirement of such a note will be ordinary income to
the extent of the original issue discount accrued on a straight-line basis (or,
if elected, according to a constant interest method based on daily compounding)
through the date of sale, exchange or retirement. In addition, such non-electing
holders who are not subject to the current inclusion requirement described in
this paragraph will be required to defer deductions for any interest paid on
indebtedness incurred or continued to purchase or carry such notes in an amount
not exceeding the deferred interest income, until such deferred interest income
is realized.
For purposes of determining the amount of original issue discount subject
to these rules, all interest payments on a short-term note, including stated
interest, are included in the short-term note's stated redemption price at
maturity.
Premium and Market Discount
If a United States holder purchases a note, other than a short-term note,
for an amount that is less than the note's stated redemption price at maturity,
or, in the case of a note issued at an original issue discount, less than its
revised issue price (which is the sum of the issue price of the note and the
aggregate amount of the original issue discount previously includable in the
gross income of any holder (without regard to any acquisition premium)) as of
the date of purchase, the amount of the difference generally will be treated as
market discount for United States federal income tax purposes; however, a note
acquired at its original issue will not have market discount unless the note is
purchased at less than its issue price. Market discount generally will be de
minimis and hence disregarded, however, if it is less than the product of .25
percent of the stated redemption price at maturity of the note and the number of
remaining complete years to maturity (or weighted average maturity in the case
of notes paying any amount other than qualified stated interest prior to
maturity).
Under the market discount rules, a United States holder is required to
treat any principal payment on, or any gain on the sale, exchange, retirement or
other disposition of, a note as ordinary income to the extent of any accrued
market discount which has not previously been included in income. If such note
is disposed of in a nontaxable transaction (other than certain specified
nonrecognition transactions), accrued market discount will be includable as
ordinary income to the United States holder as if such holder had sold the note
at its then fair market value. In addition, the United States holder may be
required to defer, until the maturity of the note or its earlier disposition in
a taxable transaction, the deduction of all or a portion of the interest
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expense on any indebtedness incurred or continued to purchase or carry such
note.
Market discount is considered to accrue ratably during the period from the
date of acquisition to the maturity of a note, unless the United States holder
elects to accrue on a constant yield basis. A United States holder of a note may
elect to include market discount in income currently as it accrues (on either a
ratable or constant yield basis), in which case the rule described above
regarding deferral of interest deductions will not apply. This election to
include market discount currently applies to all market discount obligations
acquired during or after the first taxable year to which the election applies,
and may not be revoked without the consent of the IRS.
A United States holder who purchases a note issued at an original issue
discount for an amount exceeding its adjusted issue price (as defined above) and
less than or equal to the sum of all amounts payable on the note after the
purchase date other than payments of qualified stated interest will be
considered to have purchased such note with acquisition premium. The amount of
original issue discount which such holder must include in gross income with
respect to such note will be reduced in the proportion that such excess bears to
the original issue discount remaining to be accrued as of the note's
acquisition.
A United States holder who acquires a note for an amount that is greater
than the sum of all amounts payable on the note after the purchase date other
than payments of qualified stated interest will be considered to have purchased
such note at a premium, and will not be required to include any original issue
discount in income. A United States holder generally may elect to amortize such
premium using a constant yield method over the remaining term of the note. The
amortized premium will be treated as a reduction of the interest income from the
note. Any such election shall apply to all debt instruments (other than debt
instruments the interest on which is excludable from gross income) held at the
beginning of the first taxable year to which the election applies or thereafter
acquired, and is irrevocable without the consent of the IRS. Special rules may
apply if a note is subject to call prior to maturity at a price in excess of its
stated redemption price at maturity.
Constant Yield Election
A United States holder of a note may elect to include in income all
interest and discount, as adjusted by any premium with respect to such note
based on a constant yield method, as described above. The election is made for
the taxable year in which the United States holder acquired the note, and it may
not be revoked without the consent of the IRS. If such election is made with
respect to a note having market discount, such holder will be deemed to have
elected currently to include market discount on a constant interest basis with
respect to all debt instruments having market discount acquired during the year
of election or thereafter. If made with respect to a note having amortizable
bond premium, such holder will be deemed to have made an election to amortize
premium generally with respect to all debt instruments having amortizable bond
premium held by the taxpayer during the year of election or thereafter.
Sale and Retirement of the Notes
Upon the sale, exchange or retirement of a note, a United States holder
will recognize taxable gain or loss equal to the difference between the amount
realized from the sale, exchange or retirement and the United States holder's
adjusted tax basis in the note. Such gain or loss generally will be capital gain
or loss, except to the extent of any accrued market discount (see "Premium and
Market Discount" above) and accrued but unpaid interest. Such capital gain or
loss will be
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long-term capital gain or loss if the note has been held for more than one year.
A United States holder's adjusted tax basis in a note will equal the cost of the
note, increased by any original issue discount or market discount previously
included in taxable income by the United States holder with respect to such
note, and reduced by any amortizable bond premium applied to reduce interest on
a note, any principal payments received by the United States holder and in the
case of notes issued at an original issue discount, any other payments not
constituting qualified stated interest (as defined above).
Special rules regarding the treatment of gain realized with respect to
short-term notes issued at an original issue discount are described under
"Original Issue Discount" above.
Backup Withholding and Information Reporting
A 31 percent backup withholding tax and certain information reporting
requirements may apply to payments of principal and interest (including any
original issue discount) made to, and the proceeds of disposition of a note by,
certain United States holders. Backup withholding will apply only if (i) the
United States holder fails to furnish its Taxpayer Identification Number to the
payor, (ii) the IRS notifies the payor that the United States holder has
furnished an incorrect Taxpayer Identification Number, (iii) the IRS notifies
the payor that the United States holder has failed to report properly payments
of interest and dividends or (iv) under certain circumstances, the United States
holder fails to certify, under penalty of perjury, that it has both furnished a
correct Taxpayer Identification Number and not been notified by the IRS that it
is subject to backup withholding for failure to report interest and dividend
payments. Backup withholding will not apply with respect to payments made to
certain exempt recipients, such as corporations and financial institutions.
United States holders should consult their tax advisors regarding their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption.
The amount of any backup withholding from a payment to a United States
holder will be allowed as a credit against the holder's federal income tax
liability and may entitle the holder to a refund, provided that the required
information is furnished to the IRS.
NON-UNITED STATES HOLDERS
This section describes the tax consequences to a non-United States holder.
You are a non-United States holder if you are the beneficial owner of a note and
are, for United States federal income tax purposes:
- a nonresident alien individual,
- a foreign corporation,
- a foreign partnership, or
- an estate or trust that in either case is not subject to United States federal
income tax on a net income basis on income or gain in respect of a note.
A non-United States holder generally will not be subject to United States
federal withholding tax with respect to payments of principal and interest
(including original issue discount) on notes, provided that (i) the holder does
not actually or constructively own 10 percent or more of the total combined
voting power of all classes of our stock entitled to vote, (ii) the holder is
not for United States federal income tax purposes a controlled foreign
corporation related to us through stock ownership, (iii) the beneficial owner of
the note certifies to us or our agent under penalties of perjury as to its
status as a non-United States holder and complies with applicable identification
procedures and (iv) the payment is not a payment of contingent interest
(generally a payment based on or determined by
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reference to income, profits, cash flow, sales, dividends or other comparable
attributes of the obligor or a party related to the obligor).
In certain circumstances, the above-described certification can be provided
by a bank or other financial institution. Recently finalized Treasury
regulations, that are generally effective with respect to payments made after
December 31, 2000, would provide alternative methods for satisfying the
above-described certification requirements. Those recently finalized Treasury
regulations also generally would require, in the case of notes held by a foreign
partnership, that (i) the certification described above be provided by the
partners rather than by the foreign partnership and (ii) the partnership provide
certain information, including a United States taxpayer identification number. A
look-through rule generally would apply in the case of tiered partnerships.
In addition, a non-United States holder of a note generally will not be
subject to United States federal income tax on any gain realized upon the sale,
retirement or other disposition of a note, unless the holder is an individual
who is present in the United States for 183 days or more during the taxable year
of sale, retirement or other disposition and certain other conditions are met.
If a non-United States holder of a note is engaged in a trade or business in the
United States and income or gain from the note is effectively connected with the
conduct of such trade or business, the non-United States holder will be exempt
from withholding tax if appropriate certification has been provided, but will
generally be subject to regular United States income tax on such income and gain
in the same manner as if it were a United States holder. In addition, if such
non-United States holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30 percent of its effectively connected earnings and
profits for the taxable year, subject to adjustments.
A note held by an individual who is a non-United States holder at the time
of death will not be subject to United States federal estate tax upon such
individual's death if at the time of death (i) such holder does not actually or
constructively own 10 percent or more of the total combined voting power of all
classes of our stock entitled to vote, (ii) payments with respect to the note
would not have been effectively connected with a United States trade or business
of such individual and (iii) payments with respect to the note would not be
considered to be a payment of contingent interest as described above.
Backup withholding and information reporting will not apply to payments of
principal and interest, if any, made to a non-United States holder by us on a
note with respect to which the holder has provided the required certification
under penalties of perjury of its non-United States holder status or has
otherwise established an exemption, provided in each case that we or our paying
agent, as the case may be, do not have actual knowledge that the payee is a
United States person. Payments on the sale, exchange or other disposition of a
note by a non-United States holder effected outside the United States to or
through a foreign office of a broker will not be subject to backup withholding.
However, if such broker is a United States person, a controlled foreign
corporation for United States tax purposes or a foreign person 50 percent or
more of whose gross income is derived from its conduct of a United States trade
or business for a specified three-year period (or, in addition, for payments
made after December 31, 2000, a foreign partnership engaged in a United States
trade or business or in which United States persons hold more than 50 percent of
the income or capital interests, or certain United States branches of foreign
banks or insurance companies), information reporting will be required unless the
beneficial owner has provided certain required information or documentation to
the broker to
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establish its non-United States status or otherwise establishes an exemption.
Payments to or through the United States office of a broker will be subject to
backup withholding and information reporting unless the holder certifies under
penalties of perjury to its non-United States holder status or otherwise
establishes an exemption.
Non-United States holders should consult their tax advisors regarding the
application of United States federal income tax laws, including information
reporting and backup withholding, to their particular situations.
SUPPLEMENTAL PLAN OF DISTRIBUTION
Under the terms of the Selling Agent Agreement dated as of September 8,
2000, the notes are offered from time to time by us through ABN AMRO
Incorporated, Charles Schwab & Co., Inc., Edward Jones & Co., L.P., Fidelity
Capital Markets, a division of National Financial Corporation, PaineWebber
Incorporated and Salomon Smith Barney, who have agreed to use their reasonable
best efforts to solicit purchases of the notes. We may appoint additional agents
to solicit sales of the notes; provided, however, that any such solicitation and
sale of the notes shall be on the same terms and conditions to which the agents
have agreed. We will pay the agents a gross selling concession to be divided
among themselves as they shall agree. The concession will be payable to ABN AMRO
Incorporated, the purchasing agent, in the form of a discount ranging from .60%
to 5.00%, depending upon the maturity, of the non-discounted price for each note
sold. Commissions and discounts with respect to notes with maturities in excess
of 30 years will be negotiated between us and the purchasing agent at the time
of sale. We will have the sole right to accept offers to purchase notes and may
reject any proposed purchase of notes in whole or in part. Each agent will have
the right, in its discretion reasonably exercised, to reject any proposed
purchase of notes in whole or in part. We reserve the right to withdraw, cancel
or modify the offer without notice.
Following the solicitation of orders, the agents, severally and not
jointly, may purchase notes from us through the purchasing agent as principal
for its own account. Unless otherwise set forth in the applicable pricing
supplement, such notes will be resold to one or more investors and other
purchasers at a fixed public offering price. In addition, the agents may offer
the notes they have purchased as principal to other NASD dealers in good
standing. The agents may sell notes to any such dealer at a discount and, unless
otherwise specified in the applicable pricing supplement, such discount allowed
to any dealer will not, during the distribution of the notes, be in excess of
the discount to be received by such agent from the purchasing agent. The
purchasing agent may sell notes to any such dealer at a discount not in excess
of the discount it received from us. After the initial public offering of notes
to be resold by an agent to investors and other purchasers, the public offering
price (in the case of notes to be resold at a fixed public offering price),
concession and discount may be changed.
Each agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933. We have agreed to indemnify the agents against certain
liabilities, including liabilities under the Securities Act of 1933.
Each agent has represented and agreed that it will comply with all
applicable laws and regulations in force in any jurisdiction in which it
purchases, offers or sells the notes or possesses or distributes this prospectus
supplement, the prospectus or the accompanying pricing supplement and will
obtain any consent, approval or permission required by it for the purchase,
offer or sale by it of the notes under the laws and regulations in force in any
jurisdiction to which it
S-21
<PAGE> 22
is subject or in which it makes such purchases, offers or sales and neither we
nor any other agent shall have responsibility therefor.
No note will have an established trading market when issued. We do not
intend to apply for the listing of the notes on any securities exchange, but we
have been advised by the agents that the agents intend to make a market in the
notes as permitted by applicable laws and regulations. The agents are not
obligated to do so, however, and the agents may discontinue making a market at
any time without notice. No assurance can be given as to the liquidity of any
trading market for any notes. All secondary trading in the notes will settle in
immediately available funds. See "Book-Entry System" in this prospectus
supplement.
Application may be made to list notes on stock exchanges on which we and
the purchasing agent may agree with respect to an issue. If such notes are
listed on a stock exchange, it will be specified in the applicable pricing
supplement.
In connection with an offering of the notes, the rules of the Securities
and Exchange Commission permit the purchasing agent to engage in certain
transactions that stabilize the price of the notes. Such transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the notes. If the purchasing agent creates a short position in the
notes in connection with an offering of the notes (i.e., if it sells a larger
principal amount of the notes than is set forth on the cover page of the
applicable pricing supplement), the purchasing agent may reduce that short
position by purchasing notes in the open market. In general, purchases of a
security for the purpose of stabilization or to reduce a syndicate short
position could cause the price of the security to be higher than it might
otherwise be in the absence of such purchases. The purchasing agent makes no
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the notes. In
addition, the purchasing agent makes no representation that, once commenced,
such transactions will not be discontinued without notice.
Broker-dealers and/or securities firms that have executed dealer agreements
with the purchasing agent and have agreed to market and sell the notes in
accordance with the terms of these agreements along with all other applicable
laws and regulations. You may call 1-877-373-0322 for a list of selling group
members or access the Internet at www.catpowernotes.com.
The agent and/or their affiliates may engage in various general financing
and banking transactions with us and/or our affiliates.
VALIDITY OF NOTES
The validity of the notes will be passed upon by Orrick, Herrington &
Sutcliffe LLP, 400 Sansome Street, San Francisco, California 94111, our counsel,
and by Sidley & Austin, 10 South Dearborn Street, Chicago, Illinois 60603,
counsel for the agents.
S-22
<PAGE> 23
PROSPECTUS
CATERPILLAR FINANCIAL SERVICES CORPORATION
DEBT SECURITIES
---------------------
We may from time to time sell up to $4,000,000,000 aggregate initial
offering price of our debt securities. The debt securities may consist of
debentures, notes or other types of unsecured debt. We will provide the specific
terms of these securities in supplements to this prospectus. The debt securities
are solely our obligations and are not guaranteed by Caterpillar Inc. You nor we
may use this prospectus to carry out sales of debt securities unless it is
accompanied by a prospectus supplement.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE THESE ORGANIZATIONS
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
SEPTEMBER 8, 2000
<PAGE> 24
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Caterpillar Financial Services Corporation.................. 3
Use of Proceeds............................................. 3
Ratios of Profit to Fixed Charges........................... 3
Description of Debt Securities We May Offer................. 3
Plan of Distribution........................................ 9
Validity of Debt Securities We May Offer.................... 10
Experts..................................................... 10
Where You Can Find More Information......................... 10
</TABLE>
<PAGE> 25
CATERPILLAR FINANCIAL
SERVICES CORPORATION
Caterpillar Financial Services Corporation is a wholly owned finance
subsidiary of Caterpillar Inc. We provide retail financing alternatives to
customers and dealers around the world for Caterpillar Inc. and non-competitive
related equipment, provide wholesale financing to Caterpillar Inc. dealers and
purchase short-term dealer receivables from Caterpillar Inc. We emphasize prompt
and responsive service and offer various financing plans to meet customer
requirements, increase Caterpillar Inc. sales and generate financing income.
We are a Delaware corporation that was incorporated in 1981 and are the
successor to a company formed in 1954. Our principal executive office is located
at 2120 West End Avenue, Nashville, Tennessee 37203-0001 and our telephone
number is (615) 341-1000. Unless the context otherwise indicates, the terms
"Caterpillar Financial," "we," "us" or "our" mean Caterpillar Financial Services
Corporation and its wholly owned subsidiaries, and the term "Caterpillar" means
Caterpillar Inc. and its consolidated subsidiaries.
USE OF PROCEEDS
We will use net proceeds from the sale of the debt securities for the
financing of future sales and leasing transactions, for customer and dealer
loans and for other corporate purposes. We expect to incur additional
indebtedness in connection with our financing operations. However, the amount,
timing and precise nature of such indebtedness have not yet been determined and
will depend upon the volume of our business, the availability of credit and
general market conditions.
RATIOS OF PROFIT TO FIXED CHARGES
Our ratios of profit to fixed charges for each of the years ended December
31, 1995 through 1999 and for the six months ended June 30, 1999 and 2000 are as
follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- --------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
1.32.. 1.38 1.35 1.35 1.39 1.36 1.34
</TABLE>
For the purpose of calculating this ratio, profit consists of income before
income taxes plus fixed charges. Profit is reduced by our equity in profit of
certain partnerships in which we participate. Fixed charges consist of interest
on borrowed funds (including any amortization of debt discount, premium and
issuance expense) and a portion of rentals representing interest.
DESCRIPTION OF DEBT SECURITIES
WE MAY OFFER
As required by Federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called the
"indenture." The indenture is a contract, dated as of April 15, 1985, as
supplemented, between us and U.S. Bank Trust National Association (formerly
First Trust of New York, National Association), which acts as trustee. The
trustee has two main roles. First, the trustee can enforce your rights against
us if we default. There are some limitations on the extent to which the trustee
acts on your behalf, described later under "Events of Default and Notices."
Second, the trustee performs administrative duties for us, such as sending you
interest payments, transferring your debt securities to a new buyer if you sell
and sending you notices.
The indenture and its associated documents contain the full legal text of
the matters described in this section. The indenture is an exhibit to our
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<PAGE> 26
registration statement. See "Where You Can Find More Information" for
information on how to obtain a copy.
We may issue as many distinct series of debt securities under the indenture
as we wish. The indenture does not limit the aggregate principal amount of debt
securities which we may issue. This section summarizes all the material terms of
the debt securities that are common to all series (unless otherwise indicated in
the prospectus supplement relating to a particular series). Because this section
is a summary, it does not describe every aspect of the debt securities and is
subject to and qualified in its entirety by reference to all the provisions of
the indenture, including definitions of certain terms used in the indenture. We
describe the meaning for only the more important of those terms. We also include
references in parentheses to certain sections of the indenture. Whenever we
refer to particular sections or defined terms of the indenture in this
prospectus or in the prospectus supplement, such sections or defined terms are
incorporated by reference here or in the prospectus supplement.
Our obligations, as well as the obligations of the trustee, run only to
persons who are registered as holders of debt securities. Investors who hold
debt securities in accounts at banks, brokers, or other financial intermediaries
or depositaries will not be recognized by us as registered holders of debt
securities. Accordingly, any right that holders may have under the indenture
must be exercised through such intermediaries or depositaries.
We may issue the debt securities as "original issue discount securities,"
which will be offered and sold at a substantial discount below their stated
principal amount. (section 101) The prospectus supplement relating to such
original issue discount securities will describe federal income tax consequences
and other special considerations applicable to them. The debt securities may
also be issued as indexed securities or securities denominated in foreign
currencies or currency units, as described in more detail in the prospectus
supplement relating to the debt securities being offered. The prospectus
supplement relating to the debt securities being offered will also describe any
special considerations and certain special United States federal tax
considerations applicable to such debt securities.
In addition, certain material financial, legal and other terms of the
offered debt securities are described in the prospectus supplement relating to
the debt securities being offered. Those terms may vary from the terms described
here. Thus, this summary also is subject to and qualified by reference to the
description of the particular terms of the offered debt securities described in
the prospectus supplement. The prospectus supplement relating to the offered
debt securities is attached to the front of this prospectus.
TERMS
The prospectus supplement relating to the series of debt securities being
offered will provide the following terms:
- the title of the offered debt securities;
- any limit on the aggregate principal amount of the offered debt securities;
- the date or dates on which the principal of the offered debt securities will
be payable;
- the rate or rates per annum at which the offered debt securities will bear
interest, if any, or the formula pursuant to which such rate or rates shall be
determined, and the date or dates from which such interest will accrue;
- the dates on which such interest, if any, will be payable and the regular
record dates for such interest payment dates;
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<PAGE> 27
- the place or places where principal of (and premium, if any) and interest on
offered debt securities shall be payable;
- any mandatory or optional sinking fund or analogous provisions;
- if applicable, the price at which, the periods within which and the terms and
conditions upon which the offered debt securities may, pursuant to any
optional or mandatory redemption provisions, be redeemed at our option;
- if applicable, the terms and conditions upon which the offered debt securities
may be repayable prior to final maturity at the option of the holder (which
option may be conditional);
- the portion of the principal amount of the offered debt securities, if other
than the principal amount thereof, payable upon acceleration of maturity
thereof;
- the currency or currencies, including composite currencies, in which principal
of (and premium, if any) and interest may be payable (which may be other than
those in which the offered debt securities are stated to be payable);
- any index pursuant to which the amount of payments of principal of (and
premium, if any) or interest may be determined;
- whether all or any part of the offered debt securities will be issued in the
form of a global security or securities and, if so, the depositary for, and
other terms relating to, such global security or securities; and
- any other terms of the offered debt securities. (section 301)
Unless otherwise indicated in the attached prospectus supplement, the
offered debt securities are to be issued as registered securities without
coupons in denominations of $1,000 or any integral multiple of $1,000. (section
302) No service charge will be made for any transfer or exchange of the offered
debt securities, but we may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection with such transfer or
exchange. (section 305)
The debt securities are not secured by any of our property or assets.
CERTAIN RESTRICTIONS
Support Agreement. We have a support agreement with Caterpillar which
provides, among other things, that Caterpillar will:
- remain directly or indirectly, our sole owner;
- ensure that we will maintain a tangible net worth of at least $20 million;
- permit us to use (and we are required to use) the name "Caterpillar" in the
conduct of our business; and
- ensure that we maintain a ratio of earnings and interest expense (as defined)
to interest expense of not less than 1.15 to 1.
The indenture provides that we:
- will observe and perform in all material respects all of our covenants or
agreements contained in the support agreement;
- to the extent possible, will cause Caterpillar to observe and perform in all
material respects all covenants or agreements of Caterpillar contained in the
support agreement; and
- will not waive compliance under, amend in any material respect or terminate
the support agreement; provided, however, that the support agreement may be
amended if such amendment would not have a material adverse effect on the
holders of any outstanding debt securities of any series or if the holders of
at least 66 2/3% in principal amount of the outstanding debt securities of
each series so affected (excluding from the amount so outstanding and from
such
5
<PAGE> 28
holders, the holders of such series who are not so affected) shall waive
compliance with the provisions of this section insofar as it relates to such
amendment. (section 1004)
Restrictions on Liens and Encumbrances. We will not create, assume or
guarantee any secured debt without making effective provision for securing the
debt securities (and, if we shall so determine, any other indebtedness of ours
or guaranteed by us), equally and ratably with such secured debt. The term
"secured debt" shall mean indebtedness for money borrowed which is secured by a
mortgage, pledge, lien, security interest or encumbrance on any of our property
of any character. This covenant does not apply to debt secured by:
- certain mortgages, pledges, liens, security interests or encumbrances in
connection with the acquisition, construction or improvement of any fixed
asset or other physical or real property by us;
- mortgages, pledges, liens, security interests or encumbrances on property
existing at the time of acquisition thereof, whether or not assumed by us;
- mortgages, pledges, liens, security interests or encumbrances on property of a
corporation existing at the time such corporation is merged into or
consolidated with us or at the time of a sale, lease or other disposition of
the properties of a corporation or firm as an entirety or substantially as an
entirety to us;
- mortgages, including mortgages, pledges, liens, security interests or
encumbrances, on our property in favor of the United States of America, any
state thereof or any other country, or any agency, instrumentality or
political subdivision thereof, to secure certain payments pursuant to any
contract or statute or to secure indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of construction or
improvement of the property subject to such mortgages;
- any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any mortgage, pledge, lien or
encumbrance referred to in the foregoing four items; or
- any mortgage, pledge, lien, security interest or encumbrance securing
indebtedness owing by us to one or more of our wholly owned subsidiaries.
Notwithstanding the above, we may, without securing the debt securities,
create, assume or guarantee secured debt which would otherwise be subject to the
foregoing restrictions, provided that, after giving effect thereto, the
aggregate amount of all secured debt then outstanding (not including secured
debt permitted under the foregoing exceptions) at such time does not exceed 5%
of the consolidated net tangible assets. (sections 101 and 1005)
The indenture provides that we shall not consolidate or merge with, and
shall not convey, transfer or lease our property, substantially as an entirety,
to, another corporation if as a result thereof any of our properties or assets
would become subject to a lien or mortgage not permitted by the terms of the
indenture unless effective provision shall be made to secure the debt securities
equally and ratably with (or prior to) all indebtedness thereby secured.
(section 801)
The term "consolidated net tangible assets" means, as of any particular
time, the aggregate amount of assets after deducting therefrom (a) all current
liabilities (excluding any such liability that by its terms is extendable or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed) and (b) all
goodwill, excess of cost over assets acquired, patents,
6
<PAGE> 29
copyrights, trademarks, tradenames, unamortized debt discount and expense and
other like intangibles, all as shown in our and our subsidiaries' most recent
consolidated financial statements prepared in accordance with generally accepted
accounting principles. The term "subsidiary," as used in this section, means any
corporation of which more than 50% of the outstanding stock having ordinary
voting power to elect directors is owned directly or indirectly by us or by one
or more other corporations more than 50% of the outstanding stock of which is
similarly owned or controlled. (section 101)
THE TRUSTEE
The indenture contains certain limitations on the right of the trustee, as
a creditor of ours, to obtain payment of claims in certain cases or to realize
on certain property received in respect of any such claim as security or
otherwise. (section 613) In addition, the trustee may be deemed to have a
conflicting interest and may be required to resign as trustee if at the time of
a default under the indenture the trustee is a creditor of ours.
EVENTS OF DEFAULT AND NOTICES
The following events are defined in the indenture as "events of default"
with respect to debt securities of any series:
- failure to pay principal of or premium, if any, on any debt security of that
series when due;
- failure to pay any interest on any debt security of that series when due,
continued for 60 days;
- failure to deposit any sinking fund payment, when due, in respect of any debt
security of that series;
- default in the performance, or breach, of any term or provision of those
covenants contained in the indenture that are described under "Certain
Restrictions -- Support Agreement";
- failure to perform any of our other covenants in the indenture (other than a
covenant included in the indenture solely for the benefit of a series of debt
securities other than that series), continued for 60 days after written notice
given to us by the trustee or the holders of at least 25% in principal amount
of the debt securities outstanding and affected thereby;
- Caterpillar or one of its wholly owned subsidiaries shall at any time fail to
own all of the issued and outstanding shares of our capital stock;
- default in payment of principal in excess of $10,000,000 or acceleration of
any indebtedness for money borrowed in excess of $10,000,000 by us (including
a default with respect to debt securities of any series other than that
series), if such indebtedness has not been discharged or become no longer due
and payable or such acceleration has not been rescinded or annulled, within 10
days after written notice given to us by the trustee or the holders of at
least 10% in principal amount of the outstanding debt securities of such
series;
- certain events in bankruptcy, insolvency or reorganization of us;
- certain events in bankruptcy, insolvency or reorganization of Caterpillar or
one of its subsidiaries if such events affect any significant part of our
assets or those of any of our subsidiaries; and
- any other event of default provided with respect to debt securities of such
series. (section 501)
If an event of default with respect to debt securities of any series at the
time outstanding shall occur and be continuing, either the trustee or the
holders of at least 25% in principal amount of the outstanding debt securities
of that series may declare the principal amount (or, if the debt securities of
that series are original issue discount securities, such portion of the
principal amount as
7
<PAGE> 30
may be specified in the terms of that series) of all debt securities of that
series to be due and payable immediately; provided, however, that under certain
circumstances the holders of a majority in aggregate principal amount of
outstanding debt securities of that series may rescind and annul such
declaration and its consequences. (section 502)
Reference is made to the prospectus supplement relating to any series of
offered debt securities which are original issue discount securities for the
particular provisions relating to the principal amount of such original issue
discount securities due on acceleration upon the occurrence of an event of
default and its continuation.
The indenture provides that the trustee, within 90 days after the
occurrence of a default with respect to any series of debt securities, shall
give to the holders of debt securities of that series notice of all uncured
defaults known to it (the term default to mean the events specified above
without grace periods), provided that, except in the case of default in the
payment of principal of (or premium, if any) or interest, if any, on any debt
security, the trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the holders of debt securities. (section 602)
We will be required to furnish to the trustee annually a statement by
certain of our officers to the effect that to the best of their knowledge we are
not in default in the fulfillment of any of our obligations under the indenture
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default. (section 1006)
The holders of a majority in principal amount of the outstanding debt
securities of any series affected will have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee, exercising any trust or power conferred
on the trustee with respect to the debt securities of such series, and to waive
certain defaults. (sections 512 and 513)
Under the indenture, record dates may be set for certain actions to be
taken by the holders with respect to events of default, declaring an
acceleration, or rescission and annulment thereof, the direction of the time,
method and place of conducting any proceeding for any remedy available to the
trustee, exercising any trust or power conferred on the trustee or waiving any
default. (sections 501, 502, 512 and 513)
The indenture provides that in determining whether the holders of the
requisite principal amount of the outstanding debt securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder,
- the principal amount of an original issue discount security that shall be
deemed to be outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon
acceleration of the maturity thereof; and
- the principal amount of a debt security denominated in a foreign currency or a
composite currency shall be the U.S. dollar equivalent, determined on the
basis of the rate of exchange on the business day immediately preceding the
date of our original issuance of such debt security in good faith, of the
principal amount of such debt security (or, in the case of an original issue
discount security, the U.S. dollar equivalent, determined based on the rate of
exchange prevailing on the business day immediately preceding the date of
original issuance of such debt security, of the amount determined as provided
in the first item above). (section 101)
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<PAGE> 31
The indenture provides that in case an event of default shall occur and be
continuing, the trustee shall exercise such of its rights and powers under the
indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. (section 601) Subject to such provisions, the trustee will be under
no obligation to exercise any of its rights or powers under the indenture at the
request of any of the holders of debt securities unless they shall have offered
to the trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request.
(section 603)
The occurrence of an event of default under the indenture may give rise to
a cross-default under other series of debt securities issued under the indenture
and other indebtedness of ours which may be outstanding from time to time.
MODIFICATION OF THE INDENTURE
Modifications and amendments of the indenture may be made by us and the
trustee, with the consent of the holders of not less than 66 2/3% in aggregate
principal amount of each 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 a consent of each holder of such
debt securities affected thereby:
- change the stated maturity date of the principal of (or premium, if any) or
any installment of interest, if any, on any such debt security;
- reduce the principal amount of (or premium, if any) or the interest, if any,
on any such debt security or the principal amount due upon acceleration of an
original issue discount security;
- change the place or currency of payment of principal or (or premium, if any)
or interest, if any, on any such debt security;
- impair the right to institute suit for the enforcement of any such payment on
or with respect to any such debt security;
- reduce the above-stated percentage of holders of debt securities necessary to
modify or amend the indenture; or
- 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.
A record date may be set for certain actions of the holders with respect to
consenting to any amendment. (Section 902)
PLAN OF DISTRIBUTION
We may sell the debt securities through underwriters or dealers or directly
to one or more purchasers. Any such underwriter or agent involved in the offer
and sale of the debt securities will be named in the related prospectus
supplement. The underwriters or agents may include one or more of Chase
Securities Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Smith Barney Inc.
Underwriters or agents may offer and sell the debt securities at a fixed
price or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. In connection with the sale of the debt
securities, underwriters or agents may be deemed to have received compensation
from us in the form of underwriting discounts or commissions and may also
receive commissions in the form of discounts, concessions or commissions from
the
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<PAGE> 32
underwriters or commissions from the purchasers for whom they may act as agent.
The debt securities, when first issued, will have no established trading
market. Any underwriters or agents to or through whom we sell debt securities
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 the debt securities.
Any underwriters or agents participating in the distribution of the debt
securities may be underwriters as defined in the Securities Act of 1933, as
amended, and any discounts and commissions they receive and any profit on their
resale of the debt securities may be treated as underwriting discounts and
commissions under the Securities Act. We may have agreements with the
underwriters or agents to indemnify them against or provide contribution toward
certain civil liabilities, including liabilities under the Securities Act.
In addition certain of the underwriters or agents and their associates may
be customers of, engage in transactions with, lend money to and perform services
for, us in the ordinary course of their businesses.
VALIDITY OF DEBT SECURITIES
WE MAY OFFER
The validity of debt securities will be passed upon by Orrick, Herrington &
Sutcliffe LLP, 400 Sansome Street, San Francisco, California 94111, our counsel,
and, unless otherwise indicated in a prospectus supplement relating to the
offered debt securities, by Sullivan & Cromwell, 125 Broad Street, New York, New
York 10004, counsel for the underwriters or agents.
EXPERTS
The financial statements incorporated in this prospectus by reference to
our Annual Report on Form 10-K for the year ended December 31, 1999 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND
MORE INFORMATION
We and Caterpillar each file annual, quarterly and special reports, proxy
statements (Caterpillar only) and other information with the SEC. You may read
and copy any of these documents at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings (file number 001-11241) and the filings of Caterpillar (file number
001-00768) are also available to the public at the SEC's web site at
http://www.sec.gov. You may also read any copy of these documents concerning us
at the offices of the New York Stock Exchange and these documents concerning
Caterpillar at the offices of the New York, Chicago or Pacific Stock Exchanges.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus and later information that we file with
the SEC will automatically update or supersede this information. We incorporate
by reference our Annual Report on Form 10-K for the fiscal year ended December
31, 1999, as amended, our Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2000 and June 30, 2000, our Current Report on Form 8-K dated June 1,
2000,
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and any future filings made with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, until such time as all
of the securities covered by this prospectus have been sold.
You may request a copy of these filings, at no cost, by writing or
telephoning as follows:
Caterpillar Financial Services Corporation
2120 West End Avenue
Nashville, Tennessee 37203-0001
Attn: Legal Department
Telephone: (615) 341-1000
You should not assume that the information in this prospectus and the
accompanying prospectus supplement is accurate as of any date other than the
date on the front of those documents regardless of the time of delivery of this
prospectus and the accompanying prospectus supplement or any sale of the debt
securities. Additional updating information with respect to the matters
discussed in this prospectus and the accompanying prospectus supplement may be
provided in the future by means of appendices or supplements to this prospectus
and the accompanying prospectus supplement or other documents including those
incorporated by reference.
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[Square grid containing the following four black and white pictures; upper
right -- Caterpillar track-type tractor in operation moving boulders; lower
right -- man, woman and young girl having a picnic; lower left -- Caterpillar
hydraulic excavator in a field; upper left -- two men dressed in office attire
looking at a computer screen]
