<PAGE>
FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 33-66676
PROSPECTUS SUPPLEMENT
(To Prospectus dated February 2, 1995)
$75,000,000
HEALTH CARE PROPERTY INVESTORS, INC.
MEDIUM-TERM NOTES, SERIES B
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
----------------
Health Care Property Investors, Inc. (the "Company") may offer from time to
time up to $75,000,000 aggregate initial offering price of its Medium-Term
Notes, Series B (the "Notes"), subject to reduction as a result of the sale by
the Company of certain other Securities. Each Note will mature on a Business
Day nine months or more from the date of issue, as specified in a pricing
supplement hereto (each, a "Pricing Supplement"), and may be subject to
redemption by the Company or repayment at the option of the Holder thereof, in
each case, in whole or in part, prior to its Stated Maturity Date, as set
forth therein and specified in the applicable Pricing Supplement.
The interest rate, if any, or the formula for the determination of any such
interest rate, applicable to each Note and other variable terms of the Notes
as described herein will be established by the Company at the date of issue of
such Note and will be set forth therein and specified in a Pricing Supplement.
Interest rates, interest rate formulae and such other variable terms are
subject to change by the Company, but no change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
Each Note will be issued in fully registered book-entry form (a "Book-Entry
Note") or definitive form (a "Definitive Note"), as set forth in the
applicable Pricing Supplement, in denominations of $1,000 and integral
multiples thereof, unless otherwise specified in the applicable Pricing
Supplement. Each Book-Entry Note will be represented by one or more fully
registered global securities deposited with or on behalf of The Depository
Trust Company (or such other depositary as is identified in an applicable
Pricing Supplement) (the "Depositary") and registered in the name of the
Depositary or the Depositary's nominee. Interests in Book-Entry Notes will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depositary (with respect to its participants) and the
Depositary's participants (with respect to beneficial owners).
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will bear interest at fixed rates (the "Fixed Rate Notes") or at floating
rates (the "Floating Rate Notes"). The applicable Pricing Supplement will
specify whether a Floating Rate Note is a Regular Floating Rate Note, Floating
Rate/Fixed Rate Note or Inverse Floating Rate Note and whether its rate of
interest is determined by reference to one or more of the CD Rate, the
Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal
Funds Rate, LIBOR, the Prime Rate or the Treasury Rate (each, an "Interest
Rate Basis"), or any other interest rate basis or formula, as adjusted by any
Spread and/or Spread Multiplier and will specify such other terms applicable
to such Note. See "Description of Notes." Interest on Fixed Rate Notes will
accrue from their date of issue and, unless otherwise specified in the
applicable Pricing Supplement, will be payable semiannually in arrears on June
15 and December 15 of each year and at Maturity. Unless otherwise specified in
an applicable Pricing Supplement, the rate of interest on each Floating Rate
Note will be reset daily, weekly, monthly, quarterly, semiannually or
annually, as set forth therein and specified in the applicable Pricing
Supplement, and interest on each Floating Rate Note will accrue from its date
of issue and will be payable in arrears monthly, quarterly, semiannually or
annually, as specified in the applicable Pricing Supplement, and at Maturity.
Notes may also be issued with original issue discount, and such Notes may or
may not currently pay interest.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE
PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
----------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
- -------------------------------------------------------------------------------
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<TABLE>
<CAPTION>
PRICE TO AGENT'S DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(1)(2) COMPANY(1)(3)
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<S> <C> <C> <C>
Per Note............. 100% .125%-.750% 99.875%-99.250%
- -------------------------------------------------------------------------------
Total................ $75,000,000 $93,750-$562,500 $74,906,250-$74,437,500
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1) Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated or
Goldman, Sachs & Co. (each an "Agent" and, collectively, the "Agents"),
will purchase the Notes, as principal, from the Company, for resale to
investors and other purchasers at varying prices relating to prevailing
market prices at the time of resale as determined by the applicable Agent,
or, if so specified in an applicable Pricing Supplement, for resale at a
fixed public offering price. Unless otherwise specified in an applicable
Pricing Supplement, any Note sold to an Agent as principal will be
purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage of the principal amount equal to the commission
applicable to an agency sale (as described below) of a Note of identical
maturity. If agreed to by the Company and the applicable Agent, such Agent
may utilize its reasonable efforts on an agency basis to solicit offers to
purchase the Notes at 100% of the principal amount thereof, unless
otherwise specified in an applicable Pricing Supplement. The Company will
pay a commission to each Agent, ranging from .125% to .750% of the
principal amount of a Note, depending upon its Stated Maturity, sold
through such Agent. See "Plan of Distribution."
(2) The Company has agreed to indemnify the Agents against, and to provide
contribution with respect to, certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Plan of Distribution."
(3) Before deducting expenses payable by the Company estimated at $105,000.
----------------
The Notes are being offered on a continuing basis by the Company through the
Agents. Unless otherwise specified in an applicable Pricing Supplement, the
Notes will not be listed on any securities exchange and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. The Company reserves the
right to cancel or modify the offer made hereby without notice. The Company or
an Agent, if it solicits the offer on an agency basis, may reject any offer to
purchase Notes in whole or in part. See "Plan of Distribution."
----------------
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
----------------
The date of this Prospectus Supplement is March 1, 1995.
<PAGE>
IN CONNECTION WITH THE OFFERING OF NOTES, ANY AGENT MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
DESCRIPTION OF NOTES
The Notes will be issued as a series of Debt Securities under an Indenture
(the "Indenture") between the Company and The Bank of New York, as trustee (the
"Trustee"). The following summary of certain provisions of the Notes and of the
Indenture does not purport to be complete and is qualified in its entirety by
reference to the Indenture, a copy of which has been filed as an exhibit to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus are a part. Capitalized terms used but not defined herein have the
meanings given to them in the Indenture or the Notes, as the case may be. The
term "Debt Securities," as used in this Prospectus Supplement, refers to all
securities issued and issuable from time to time under the Indenture and
includes the Notes. The following description of Notes will apply unless
otherwise specified in an applicable Pricing Supplement.
GENERAL
All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured general obligations of the Company and will rank
pari passu with all other unsecured and unsubordinated indebtedness of the
Company from time to time outstanding. The Indenture does not limit the
aggregate principal amount of Debt Securities which may be issued thereunder
and Debt Securities may be issued thereunder from time to time in one or more
series up to the aggregate principal amount from time to time authorized by the
Company for each series. The Company may, from time to time, without the
consent of the Holders of the Notes, provide for the issuance of Notes or other
Debt Securities under the Indenture in addition to the $75,000,000 aggregate
initial offering price of Notes offered hereby and the other Debt Securities
previously issued, if any.
Except as described under "Description of the Debt Securities--Certain
Covenants of the Company--Limitation on Borrowing Money" in the Prospectus, the
Indenture does not contain any other provisions that would afford Holders of
Debt Securities protection in the event of a highly leveraged transaction,
reorganization, restructuring, change in control, merger or similar transaction
involving the Company that may adversely affect Holders of Debt Securities.
The Notes are currently limited to $75,000,000 aggregate initial offering
price. As of the date of this Prospectus Supplement, $43,000,000 aggregate
principal amount of the Notes has been issued by the Company in varying
principal amounts and at varying interest rates and maturities, in each case as
specified in the applicable Pricing Supplement filed with the Securities and
Exchange Commission at the time of issuance of such Notes. The Notes will be
offered on a continuing basis and will mature on any business day nine months
or more from the date of issue, as specified in an applicable Pricing
Supplement. Unless otherwise specified in an applicable Pricing Supplement,
interest-bearing Notes will either be Fixed Rate Notes or Floating Rate Notes
as specified in the applicable Pricing Supplement. Notes may be issued at
significant discounts from their principal amount payable at the Stated
Maturity Date (or on any prior date on which the principal or an installment of
principal of a Note becomes due and payable, whether by the declaration of
acceleration, call for redemption at the option of the Company, repayment at
the option of the Holder or otherwise) (each such date, a "Maturity"), and some
Notes may not bear interest. The Notes will be denominated in United States
dollars and payments of principal of, and premium, if any, and interest on, the
Notes will be made in United States dollars.
Interest rates, interest rate formulae and other variable terms of the Notes
are subject to change by the Company 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 the Company.
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Each Note will be issued in fully registered form as a Book-Entry Note or a
Definitive Note, in denominations of $1,000 and integral multiples thereof,
unless otherwise specified in the applicable Pricing Supplement. Book-Entry
Notes may be transferred or exchanged only through the Depositary. See "Book-
Entry Notes." Registration of transfer of Definitive Notes will be made at the
office or agency of the Company maintained by the Company for such purpose in
the Borough of Manhattan, The City of New York. No service charge will be made
by the Company or the Trustee for any such registration of transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith
(other than exchanges pursuant to the Indenture not involving any transfer).
Payments of principal of, and premium and interest, if any, on Book-Entry
Notes will be made by the Company through the Trustee to the Depositary. See
"Book-Entry Notes." In the case of Definitive Notes, payment of principal or
premium, if any, at the Maturity of each Definitive Note will be made in
immediately available funds upon presentation of the Definitive Note at the
office or agency of the Company maintained by the Company for such purpose in
the Borough of Manhattan, The City of New York, or at such other place as the
Company may designate (or, in the case of any repayment on an Optional
Repayment Date, upon presentation of the Definitive Note in accordance with the
provisions thereon as described below). Payment of interest due at Maturity
will be made to the person to whom payment of the principal of the Definitive
Note shall be made. Payment of interest due on Definitive Notes other than at
Maturity will be made at the office or agency of the Company maintained by the
Company for such purpose or, at the option of the Company, may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the registry books of the Company. Notwithstanding the foregoing, a
Holder of $10,000,000 or more in aggregate principal amount of Definitive Notes
having the same Interest Payment Dates will, at the option of the Company, be
entitled to receive interest payments (other than at Maturity) by wire transfer
of immediately available funds if appropriate wire transfer instructions have
been received in writing by the Trustee not less than 15 days prior to the
applicable Interest Payment Date. Such wire instructions, upon receipt by the
Trustee, shall remain in effect until revoked by such Holder.
REDEMPTION AT THE OPTION OF THE COMPANY
Unless otherwise indicated in an applicable Pricing Supplement, Notes will
not be subject to any sinking fund. The Notes will be redeemable at the option
of the Company prior to the Stated Maturity Date only if an Initial Redemption
Date is specified therein and in the applicable Pricing Supplement. If so
indicated in the applicable Pricing Supplement, Notes will be subject to
redemption at the option of the Company on any date on and after the applicable
Initial Redemption Date specified in such Pricing Supplement. On or after the
Initial Redemption Date, if any, the related Note may be redeemed at any time
in whole or from time to time in part in increments of $1,000 at the option of
the Company at the applicable Redemption Price, together with interest thereon
payable to the date of redemption, on notice given not more than 60 nor less
than 30 days prior to the date of redemption and in accordance with the
provisions of the Indenture. "Redemption Price," with respect to a Note, will
initially mean a percentage, the Initial Redemption Percentage, of the
principal amount of such Note to be redeemed specified in the applicable
Pricing Supplement and shall decline at each anniversary of the Initial
Redemption Date by a percentage, the Annual Redemption Percentage Reduction, if
any, specified in the applicable Pricing Supplement, of the principal amount to
be redeemed until the Redemption Price is 100% of such principal amount.
REPAYMENT AT THE OPTION OF THE HOLDER
If so indicated in an applicable Pricing Supplement, Notes will be repayable
by the Company in whole or in part at the option of the Holders thereof on
their respective Optional Repayment Dates specified in such Pricing Supplement.
If no Optional Repayment Date is indicated with respect to a Note, such Note
will not be repayable at the option of the Holder prior to the Stated Maturity
Date. Any repayment in part will be in increments of $1,000 provided that any
remaining principal amount of such Note will be an authorized denomination of
such Note. Unless otherwise provided in an applicable Pricing Supplement, the
repayment
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price for any Note so repaid will be 100% of the principal amount to be repaid,
together with interest thereon payable to the date of repayment. For any Note
to be so repaid the Note must be received, together with the form thereon
entitled "Option to Elect Repayment" duly completed, by the Trustee at the
Corporate Trust Office (or such other address of which the Company shall from
time to time notify the Holders) not more than 60 nor less than 30 days prior
to the Optional Repayment Date. Exercise of such repayment option by the Holder
will be irrevocable.
While the Book-Entry Notes are represented by global securities held by or on
behalf of the Depositary, and registered in the name of the Depositary or the
Depositary's nominee, the Depositary or its nominee will be the Holder of such
Book-Entry Notes and therefore will be the only entity that can exercise a
right to repayment. In order to ensure that the Depositary or its nominee will
timely exercise a right to repayment with respect to a particular Book-Entry
Note, the beneficial owner of such Book-Entry Note must instruct the
participant through which it holds an interest in such Book-Entry Note to
notify the Depositary of its desire to exercise a right of repayment. Different
firms may have different deadlines for accepting instructions from their
customers. Accordingly, beneficial owners of Book-Entry Notes should consult
the participants through which they own their interest in the Book-Entry Notes
for the respective deadlines for such participants. All notices shall be
executed by a duly authorized officer of such participant (with signature
guaranteed) and shall be irrevocable. In addition, such beneficial owners of
Book-Entry Notes shall effect delivery of such Book-Entry Notes at the time
such notices of election are given to the Depositary by causing the participant
to transfer such beneficial owner's interest in the Book-Entry Notes, on the
Depositary's records, to the Trustee. Conveyance of notices and other
communications by the Depositary to participants, by participants to indirect
participants and by participants and indirect participants to beneficial owners
of the Book-Entry Notes will be governed by agreements among them, subject to
any statutory or regulatory requirements as may be in effect from time to time.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws or regulations in connection with any such repayment.
The Company may at any time purchase Notes at any price or prices in the open
market or otherwise. Notes so purchased by the Company may be held or resold
or, at the discretion of the Company, may be surrendered to the Trustee for
cancellation.
INTEREST
General
Unless otherwise specified in an applicable Pricing Supplement, each Note
will bear interest from the date of issue at the rate per annum or, in the case
of a Floating Rate Note, pursuant to the interest rate formula, stated therein
and in the applicable Pricing Supplement until the principal thereof is paid or
made available for payment. Interest will be payable in arrears on each
Interest Payment Date specified in the applicable Pricing Supplement on which
an installment of interest is due and payable and at Maturity. Unless otherwise
specified in an applicable Pricing Supplement, the first payment of interest on
any Note originally issued between a record date and the related Interest
Payment Date will be made on the Interest Payment Date immediately following
the next succeeding record date to the registered Holder on such next
succeeding record date. Unless otherwise specified in an applicable Pricing
Supplement, a "record date" shall be the fifteenth day (whether or not a
Business Day) immediately preceding the related Interest Payment Date.
Fixed Rate Notes
Unless otherwise specified in an applicable Pricing Supplement, each Fixed
Rate Note will bear interest from, and including, the date of issue, or the
most recent date to which interest has been paid or duly provided for, to, but
excluding, the Interest Payment Date or Maturity, as the case may be, at the
rate per annum stated on the face thereof until the principal amount thereof is
paid or made available for payment. Unless
S-4
<PAGE>
otherwise specified in an applicable Pricing Supplement, interest on Fixed Rate
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
Interest on Fixed Rate Notes will be payable semiannually, unless otherwise
specified in an applicable Pricing Supplement, on June 15 and December 15 of
each year and at Maturity. If any Interest Payment Date or the Maturity of a
Fixed Rate Note falls on a day that is not a Business Day, the related payment
of principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
Floating Rate Notes
Unless otherwise specified in an applicable Pricing Supplement, Floating Rate
Notes will be issued as described below. Each applicable Pricing Supplement
will specify certain terms with respect to which such Floating Rate Note is
being delivered, including: whether such Floating Rate Note is a "Regular
Floating Rate Note," a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note," the Interest Rate Basis or Bases, Initial Interest Rate, Interest
Reset Dates, Interest Reset Period, record dates, Interest Payment Dates, Index
Maturity, maximum interest rate and minimum interest rate, if any, and the
Spread and/or Spread Multiplier, if any, and if one or more of the specified
Interest Rate Bases is LIBOR, the Designated LIBOR Page, as described below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(i) Unless such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note," an "Inverse Floating Rate Note" or as having an
Addendum attached, such Floating Rate Note will be designated a "Regular
Floating Rate Note" and, except as described below or in an applicable
Pricing Supplement, bear interest at the rate determined by reference to
the applicable Interest Rate Basis (i) plus or minus the applicable Spread,
if any, and/or (ii) multiplied by the applicable Spread Multiplier, if any.
Commencing on the Initial Interest Reset Date, the rate at which interest
on such Regular Floating Rate Note shall be payable shall be reset as of
each Interest Reset Date; provided, however, that the interest rate in
effect for the period from the Original Issue Date to the Initial Interest
Reset Date will be the Initial Interest Rate.
(ii) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest at the rate
determined by reference to the applicable Interest Rate Basis (i) plus or
minus the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any. Commencing on the Initial Interest
Reset Date, the rate at which interest on such Floating Rate/Fixed Rate
Note shall be payable shall be reset as of each Interest Reset Date;
provided, however, that (i) the interest rate in effect for the period from
the Original Issue Date to the Initial Interest Reset Date will be the
Initial Interest Rate, and (ii) the interest rate in effect commencing on,
and including, the Fixed Rate Commencement Date to Maturity shall be the
Fixed Interest Rate, if such rate is specified in the applicable Pricing
Supplement, or if no such Fixed Interest Rate is so specified, the interest
rate in effect thereon on the day immediately preceding the Fixed Rate
Commencement Date.
(iii) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest equal to the Fixed
Interest Rate specified in the related Pricing Supplement minus the rate
determined by reference to the Interest Rate Basis (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any. Commencing on the Initial Interest Reset Date, the rate
at which interest on such Inverse Floating Rate Note is payable shall be
reset as of each Interest Reset Date; provided, however, that the interest
rate in effect for the period from the Original Issue Date to the Initial
Interest Reset Date will be the Initial Interest Rate.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating
Rate Note shall bear interest in accordance with the terms described in such
Addendum and the applicable Pricing Supplement.
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Unless otherwise provided in the applicable Pricing Supplement, the interest
rate with respect to each Interest Rate Basis will be determined in accordance
with the applicable provisions below. Except as set forth above or in an
applicable Pricing Supplement, the interest rate in effect on each day shall be
(a) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date immediately preceding such Interest Reset Date
or (b) if such day is not an Interest Reset Date, the interest rate determined
as of the Interest Determination Date immediately preceding the next preceding
Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to an
"Interest Rate Basis," which may be one or more of (i) the "CD Rate," (ii) the
"Commercial Paper Rate," (iii) the "Eleventh District Cost of Funds Rate," (iv)
the "Federal Funds Rate," (v) "LIBOR," (vi) the "Prime Rate," (vii) the
"Treasury Rate," or (viii) such other Interest Rate Basis or interest rate
formula as may be set forth in the applicable Pricing Supplement; provided,
however, that with respect to a Floating Rate/Fixed Rate Note, the interest
rate commencing on the Fixed Rate Commencement Date and continuing, unless
otherwise specified in the applicable Pricing Supplement, until Maturity shall
be the Fixed Interest Rate, if such rate is specified in the applicable Pricing
Supplement, or if no such Fixed Interest Rate is so specified, the interest
rate in effect thereon on the day immediately preceding the Fixed Rate
Commencement Date.
The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate Note.
The "Spread Multiplier" is the percentage of the related Interest Rate Basis or
Bases applicable to such Floating Rate Note by which such Interest Rate Basis
or Bases will be multiplied to determine the applicable interest rate on such
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the Interest Rate Basis or Bases
will be calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by the Company
from time to time, but no such change will affect any Floating Rate Note
previously issued or as to which an offer has been accepted by the Company.
Each applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such Interest Rate will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Date will be, in the case of
Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the
Wednesday of each week (with the exception of weekly reset Treasury Rate Notes
which will reset the Tuesday of each week, except as specified below); (iii)
monthly, the third Wednesday of each month (with the exception of Eleventh
District Cost of Funds Rate Notes, all of which reset monthly, which will reset
on the first calendar day of the month); (iv) quarterly, the third Wednesday of
March, June, September and December of each year; (v) semiannually, the third
Wednesday of the two months specified in the applicable Pricing Supplement; and
(vi) annually, the third Wednesday of the month specified in the applicable
Pricing Supplement; provided however, that, with respect to Floating Rate/Fixed
Rate Notes, the fixed rate of interest in effect for the period from the Fixed
Rate Commencement Date until Maturity shall be the Fixed Interest Rate or the
interest rate in effect on the day immediately preceding the Fixed Rate
Commencement Date, as specified in the applicable Pricing Supplement. If any
Interest Reset Date for any Floating Rate Note would otherwise be a day that is
not a Business Day, such Interest Reset Date will be postponed to the next
succeeding day that is a Business Day, except that in the case of a Floating
Rate Note as to which LIBOR is an applicable Interest Rate Basis, if such
Business Day falls in the next succeeding calendar month, such Interest Reset
Date will be the immediately preceding Business Day. As used herein, "Business
Day" means, unless otherwise specified in the applicable Pricing Supplement,
any day that in The City of New York, is not a day on which banking
institutions are authorized or required by law or regulation to close and, with
respect to Notes as to which LIBOR is an applicable Interest Rate Basis, is
also a London Business Day. As used herein, "London Business Day" means any day
on which dealings in deposits of United States dollars are transacted in the
London interbank market.
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A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical limitation, or ceiling, on the rate at which interest may
accrue during any interest period and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any interest period. In
addition to any maximum interest rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on Floating Rate
Notes will in no event be higher than the maximum rate permitted by California
law, as the same may be modified by United States law of general application.
Each Floating Rate Note will bear interest from the date of issue at the
rates specified therein until the principal thereof is paid or otherwise made
available for payment. Except as provided below or in an applicable Pricing
Supplement, the Interest Payment Dates in the case of Floating Rate Notes which
reset: (i) daily, weekly or monthly, will be the third Wednesday of each month
or the third Wednesday of March, June, September and December of each year as
specified in the applicable Pricing Supplement; (ii) quarterly, will be the
third Wednesday of March, June, September and December of each year; (iii)
semiannually, will be the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and (iv) annually, will be the
third Wednesday of the month of each year specified in the applicable Pricing
Supplement and, in each case, at Maturity. If any Interest Payment Date for any
Floating Rate Note (other than an Interest Payment Date at Maturity) would
otherwise be a day that is not a Business Day, such Interest Payment Date will
be postponed to the next succeeding day that is a Business Day except that in
the case of a Floating Rate Note as to which LIBOR is an applicable Interest
Rate Basis, if such Business Day falls in the next succeeding calendar month,
such Interest Payment Date will be the immediately preceding Business Day. If
the Maturity of a Floating Rate Note falls on a day that is not a Business Day,
the payment of principal, premium, if any, and interest will be made on the
next succeeding Business Day, and no interest on such payment shall accrue for
the period from and after such Maturity.
Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation on Floating Rate Notes will be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts
used in or resulting from such calculation on Floating Rate Notes will be
rounded to the nearest cent (with one-half cent being rounded upward).
Unless otherwise specified in the applicable Pricing Supplement, interest
payments on Floating Rate Notes will equal the amount of interest accrued from
and including the next preceding Interest Payment Date in respect of which
interest has been paid (or from and including the date of issue, if no interest
has been paid with respect to such Floating Rate Notes), to but excluding the
related Interest Payment Date; provided, however, that the interest payments on
Floating Rate Notes made at Maturity will include interest accrued to but
excluding the date of Maturity.
With respect to each Floating Rate Note, accrued interest is calculated by
multiplying its face amount by an accrued interest factor. Such accrued
interest factor is computed by adding the interest factor calculated for each
day in the period for which accrued interest is being calculated. Unless
otherwise specified in the applicable Pricing Supplement, the interest factor
for each such day will be computed by dividing the interest rate applicable to
such day by 360, in the case of Notes for which the Interest Rate Basis is the
CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate,
the Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number of
days in the year in the case of Notes for which the Interest Rate Basis is the
Treasury Rate. Unless otherwise specified in an applicable Pricing Supplement,
the interest factor for Notes for which the interest rate is calculated with
reference to two or more Interest Rate Bases will be calculated in each period
in the same manner as if only one of the applicable Interest Rate Bases applied
as specified in the applicable Pricing Supplement and the Notes.
The interest rate applicable to each Interest Rate Reset Period commencing on
the Interest Reset Date with respect to such Interest Rate Reset Period will be
the rate determined as of the applicable Interest Determination Date. Unless
otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date with respect to the CD Rate, the Commercial Paper Rate, the
Federal Funds Rate and
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the Prime Rate will be the second Business Day preceding each Interest Reset
Date for the related Note; the Interest Determination Date with respect to the
Eleventh District Cost of Funds Rate will be the last working day of the month
immediately preceding each Interest Reset Date on which the Federal Home Loan
Bank of San Francisco (the "FHLB of San Francisco") publishes the Index; the
Interest Determination Date with respect to LIBOR will be the second London
Business Day preceding each Interest Reset Date. With respect to the Treasury
Rate, unless otherwise specified in an applicable Pricing Supplement, the
Interest Determination Date will be the day in the week in which the related
Interest Reset Date falls on which day Treasury Bills (as defined below) are
normally auctioned (Treasury Bills are normally sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be held on
the preceding Friday); provided, however, that if an auction is held on the
Friday of the week preceding the related Interest Reset Date, the related
Interest Determination Date will be such preceding Friday; and provided,
further, that if an auction falls on any Interest Reset Date, then the related
Interest Reset Date will instead be the first Business Day following such
auction. Unless otherwise specified in the applicable Pricing Supplement, the
Interest Determination Date pertaining to a Floating Rate Note the interest
rate of which is determined with reference to two or more Interest Rate Bases
will be the latest Business Day which is at least two Business Days prior to
such Interest Reset Date for such Floating Rate Note on which each Interest
Rate Basis is determinable. Each Interest Rate Basis will be determined on such
date, and the applicable interest rate will take effect on the related Interest
Reset Date.
Unless otherwise provided in the applicable Pricing Supplement, The Bank of
New York will be the "Calculation Agent." Upon request of the Holder of any
Floating Rate Note, the Calculation Agent will provide the interest rate then
in effect and, if determined, the interest rate that will become effective as a
result of a determination made for the next Interest Reset Date with respect to
such Floating Rate Note. Unless otherwise specified in the applicable Pricing
Supplement, the "Calculation Date," if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date, or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or Maturity, as the case may be.
CD Rate. CD Rate Notes will bear interest at the rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in such CD Rate Notes and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CD Rate (a "CD Rate Interest Determination Date"), the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)," or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable certificates of deposit of the Index Maturity
specified in the applicable Pricing Supplement as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" or any successor publication
("Composite Quotations") under the heading "Certificates of Deposit." If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
P.M., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered rates as
of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date,
of three leading nonbank dealers in negotiable United States dollar
certificates of deposit in The City of New York selected by the Calculation
Agent (after consultation with the Company) for negotiable certificates of
deposit of major United States money market banks for negotiable certificates
of deposit with a remaining maturity closest to the Index Maturity designated
in the applicable Pricing Supplement in an amount that is representative for a
single transaction in that market at that time; provided, however, that if the
dealers so selected by the Calculation
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Agent are not quoting as set forth above, the CD Rate with respect to such CD
Rate Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
Commercial Paper Rate. Commercial Paper Rate Notes will bear interest at the
rates (calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any) specified in such Commercial Paper Rate Notes
and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to
a Commercial Paper Rate Note or any Floating Rate Note for which the interest
rate is determined with reference to the Commercial Paper Rate (a "Commercial
Paper Rate Interest Determination Date"), the Money Market Yield (as defined
below) on such date of the rate for commercial paper having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "Commercial Paper." In the event that such rate is not published by
3:00 P.M., New York City time, on the related Calculation Date, then the
Commercial Paper Rate will be the Money Market Yield on such Commercial Paper
Rate Interest Determination Date of the rate for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If by 3:00 P.M., New York City
time, on the related Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be calculated by the
Calculation Agent and will be the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on such
Commercial Paper Rate Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent
(after consultation with the Company) for commercial paper having the Index
Maturity designated in the applicable Pricing Supplement placed for an
industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized securities rating agency, provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Commercial Paper Rate determined on such Commercial Paper
Rate Interest Determination Date will be the Commercial Paper Rate in effect on
such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated in
accordance with the following formula:
D x 360
Money Market Yield = ------------- X 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted
on a bank discount basis and expressed as a decimal, and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
Eleventh District Cost of Funds Rate. Eleventh District Cost of Funds Rate
Notes will bear interest at the rates (calculated with reference to the
Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier,
if any) specified in such Eleventh District Cost of Funds Rate Notes and in any
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note or any Floating
Rate Note for which the interest rate is determined with reference to the
Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate
Interest Determination Date"), the rate equal to the monthly weighted average
cost of funds for the calendar month preceding such Eleventh District Cost of
Funds Rate Interest Determination Date as set forth under the caption "11th
District" on Telerate Page 7175 as of 11:00 A.M., San Francisco time, on such
Eleventh District Cost of Funds Rate Interest Determination Date. If such rate
does not appear on Telerate Page 7175 on any related Eleventh District Cost of
Funds Rate Interest Determination Date, the Eleventh District Cost of Funds
Rate for such
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Eleventh District Cost of Funds Rate Interest Determination Date shall be the
monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month preceding the date of such announcement. If the FHLB of San Francisco
fails to announce such rate for the calendar month next preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, then the Eleventh
District Cost of Funds Rate for such Eleventh District Cost of Funds Rate
Interest Determination Date will be the Eleventh District Cost of Funds Rate in
effect on such Eleventh District Cost of Funds Rate Interest Determination
Date.
Federal Funds Rate. Federal Funds Rate Notes will bear interest at the rates
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in such Federal Funds Rate Notes and in
any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to
a Federal Funds Rate Note or any Floating Rate Note for which the interest rate
is determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)" or, if not
published by 3:00 P.M., New York City time, on the related Calculation Date,
the rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If by
3:00 P.M., New York City time, on the related Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, then the Federal Funds
Rate on such Federal Funds Rate Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the rates for the
last transaction in overnight United States dollar federal funds arranged by
three leading brokers of federal funds transactions in The City of New York
selected by the Calculation Agent (after consultation with the Company) prior
to 9:00 A.M., New York City time on such Federal Funds Rate Interest
Determination Date; provided, however that if the brokers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate with respect to such Federal Funds Rate Interest Determination Date
will be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date.
LIBOR. LIBOR Notes will bear interest at the rates (calculated with reference
to LIBOR and the Spread and/or Spread Multiplier, if any) specified in such
LIBOR Notes and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note or any Floating Rate Note for which the interest rate is determined
with reference to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will
be either: (a) if "LIBOR Reuters" is specified in the applicable Pricing
Supplement, the arithmetic mean of the offered rates (unless the specified
Designated LIBOR Page by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in United States
dollars having the Index Maturity designated in the applicable Pricing
Supplement, commencing on the second London Business Day immediately
following that LIBOR Interest Determination Date, that appear on the
Designated LIBOR Page specified in the applicable Pricing Supplement as of
11:00 A.M. London time, on that LIBOR Interest Determination Date, if at
least two such offered rates appear (unless, as aforesaid, only a single
rate is required) on such Designated LIBOR Page, or (b) if "LIBOR Telerate"
is specified in the applicable Pricing Supplement, the rate for deposits in
United States dollars having the Index Maturity designated in the
applicable Pricing Supplement commencing on the second London Business Day
immediately following that LIBOR Interest Determination Date that appears
on the Designated LIBOR Page specified in the applicable Pricing Supplement
as of 11:00 A.M. London time, on that LIBOR Interest Determination Date. If
fewer than
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two offered rates appear, or no rate appears, as applicable, LIBOR in
respect of the related LIBOR Interest Determination Date will be determined
as if the parties had specified the rate described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on
the applicable Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent (after consultation with the Company), to provide the
Calculation Agent with its offered quotation for deposits in United States
dollars for the period of the Index Maturity designated in the applicable
Pricing Supplement, commencing on the second London Business Day
immediately following such LIBOR Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 A.M., London
time, on such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in United States dollars in
such market at such time. If at least two such quotations are provided,
LIBOR determined on such LIBOR Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR determined on such LIBOR Interest Determination Date will
be the arithmetic mean of the rates quoted at approximately 11:00 A.M., New
York City time, on such LIBOR Interest Determination Date by three major
banks in The City of New York selected by the Calculation Agent (after
consultation with the Company) for loans in United States dollars to
leading European banks, having the Index Maturity designated in the
applicable Pricing Supplement and in a principal amount that is
representative for a single transaction in United States dollars in such
market at such time; provided, however, that if the banks so selected by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined on such LIBOR Interest Determination Date will be LIBOR in
effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service for the purpose of displaying the London interbank rates of major
banks for United States dollar deposits, or (b) if "LIBOR Telerate" is
designated in the applicable Pricing Supplement, the display on the Dow Jones
Telerate Service for the purpose of displaying the London interbank rates of
major banks for the United States dollar deposits. If neither LIBOR Reuters nor
LIBOR Telerate is specified in the applicable Pricing Supplement, LIBOR will be
determined as if LIBOR Telerate had been specified.
Prime Rate. Prime Rate Notes will bear interest at the rates (calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any)
specified in such Prime Rate Notes and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Interest Determination Date relating to a Prime Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the Prime Rate (a "Prime Rate Interest Determination Date"), the
rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 9:00 A.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page as such bank's prime rate or base
lending rate as in effect for that Prime Rate Interest Determination Date. If
fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for such Prime Rate Interest Determination Date, the Prime
Rate shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by four major money
center banks in The City of New York selected by the Calculation Agent (after
consultation with the Company). If fewer than two such rates appear on the
Reuters Screen NYMF Page, the Prime Rate will be determined by the Calculation
Agent on the basis of the rates furnished in The City of New York by three
substitute banks or trust companies organized and doing business under the laws
of the United States, or any
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state thereof, having total equity capital of at least $500 million and being
subject to supervision or examination by Federal or state authority, selected
by the Calculation Agent (after consultation with the Company) to provide such
rate or rates; provided, however, that if the banks or trust companies selected
as aforesaid are not quoting as mentioned in this sentence, the Prime Rate for
such Prime Rate Interest Determination Date will be the Prime Rate as
determined based on the last such rate published in H.15(519).
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the NYMF
page on that service for the purpose of displaying prime rates or base lending
rates of major United States banks).
Treasury Rate. Treasury Rate Notes will bear interest at the rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in such Treasury Rate Notes and in any applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate Note or any Floating Rate Note for which the interest rate is
determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate applicable to the most recent auction of direct
obligations of the United States ("Treasury Bills") having the Index Maturity
specified in the applicable Pricing Supplement, as such rate is published in
H.15(519) under the heading "Treasury Bills-auction average (investment)" or,
if not published by 3:00 P.M., New York City time, on the related Calculation
Date, the auction average rate (expressed as a bond equivalent on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) as
otherwise announced by the United States Department of the Treasury. In the
event that the results of the auction of Treasury Bills having the Index
Maturity designated in the applicable Pricing Supplement are not reported as
provided by 3:00 P.M., New York City time, on such Calculation Date, or if no
such auction is held in a particular week, then the Treasury Rate will be
calculated by the Calculation Agent and will be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market
bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Rate Interest Determination Date, of three leading primary United States
government securities dealers (which may include one or both of the Agents)
selected by the Calculation Agent (after consultation with the Company), for
the issue of Treasury Bills with a remaining maturity closest to the Index
Maturity designated in the applicable Pricing Supplement; provided, however,
that if the dealers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate with respect to such Treasury
Rate Interest Determination Date will be the Treasury Rate in effect on such
Treasury Rate Interest Determination Date.
OTHER PROVISIONS; ADDENDA
Any provisions with respect to Notes, including the determination of an
Interest Rate Basis, the specification of an Interest Rate Basis, calculation
of the interest rate applicable to a Floating Rate Note, its Interest Payment
Dates or any other matter relating thereto may be modified by the terms as
specified under "Other Provisions" on the face thereof or in an Addendum
relating thereto, if so specified on the face thereof and in the applicable
Pricing Supplement.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their stated redemption price at
Maturity, resulting in such Notes being treated as issued with original issue
discount for Federal income tax purposes ("Original Issue Discount Notes").
Such Original Issue Discount Notes may currently pay no interest or interest at
a rate which at the time of issuance is below market rates. See "Material
Federal Income Tax Considerations." Certain additional considerations relating
to any Original Issue Discount Notes may be described in the Pricing Supplement
relating thereto.
INDEXED NOTES
Notes also may be issued with the principal amount payable at Maturity and/or
interest to be paid thereon to be determined with reference to the price or
prices of specified commodities or stocks, the exchange
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rate of one or more specified currencies (including a composite currency such
as the European Currency Unit) relative to an indexed currency, interest rate
indices, interest rate or exchange rate swap indices or such other price or
exchange rate or other financial index or indices as may be specified in such
Note ("Indexed Notes"), as set forth in an applicable Pricing Supplement.
Holders of such Notes may receive a principal amount at Maturity that is
greater than or less than the face amount of the Notes depending upon the
relative value at Maturity of the specified indexed item. Information as to the
method for determining the principal amount payable at Maturity, certain
historical information with respect to the specified indexed item or items and
tax considerations associated with investment in Indexed Notes will be set
forth in the applicable Pricing Supplement.
An investment in Notes indexed, as to principal or interest or both, to one
or more values of currencies (including exchange rates and swap indices between
currencies), commodities or interest rate or other indices entails significant
risks that are not associated with similar investments in a conventional fixed-
rate debt security. If the interest rate of such a Note is so indexed, it may
result in an interest rate that is less than that payable on a conventional
fixed-rate debt security issued at the same time, including the possibility
that no interest will be paid, and, if the principal amount of such a Note is
so indexed, the principal amount payable at Maturity may be less than the
original purchase price of such Note if allowed pursuant to the terms of such
Note, including the possibility that no principal will be paid. The secondary
market for such Notes will be affected by a number of factors independent of
the creditworthiness of the Company and the value of the applicable currency,
commodity or interest rate index, including the volatility of the applicable
currency, commodity or interest rate index, the time remaining to the maturity
of such Notes, the amount outstanding of such Notes and market interest rates.
The value of the applicable currency, commodity or interest rate index depends
on a number of interrelated factors, including economic, financial and
political events, over which the Company has no control. Additionally, if the
formula used to determine the principal amount or interest payable with respect
to such Notes contains a multiple or leverage factor, the effect of any change
in the applicable currency, commodity or interest rate index may be increased.
The historical experience of the relevant currencies, commodities or interest
rate indices should not be taken as an indication of future performance of such
currencies, commodities or interest rate indices during the term of any Note.
The credit ratings assigned to the Company's Medium-Term Note program are
reflective of the Company's credit status, and are not in any respect
reflective of the potential impact of the factors discussed above or any other
factors on the market value of the Notes. Accordingly, prospective investors
should consult their own financial and legal advisors as to the risks entailed
by an investment in such Notes and the suitability of such Notes in light of
their particular circumstances.
Notwithstanding anything to the contrary contained herein or in the
Prospectus, for purposes of determining the rights of a Holder of a Note
indexed as to principal in respect of voting for or against amendments to the
Indenture and modifications and the waiver of rights thereunder, the principal
amount of such Indexed Note shall be deemed to be equal to the face amount
thereof upon issuance. The method for determining the amount of principal
payable at Maturity will be specified in the applicable Pricing Supplement.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes having the same Original Issue Date,
Stated Maturity Date and otherwise having identical terms and provisions will
be represented by a single global security (each, a "Registered Global
Security"); provided, however, that if by reason of the foregoing, a single
Registered Global Security would exceed $150,000,000 in aggregate principal
amount, one Registered Global Security will be issued to represent each
$150,000,000 of aggregate principal amount and an additional Registered Global
Security will be issued to represent any remaining principal amount. Each
Registered Global Security representing Book-Entry Notes will be deposited
with, or on behalf of, the Depositary. Except as set forth below, Registered
Global Securities may not be transferred except as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any nominee to a
successor of the Depositary or a nominee of such successor.
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The Depository Trust Company, New York, New York ("DTC"), will be the initial
Depositary with respect to the Notes. DTC has advised the Company and the
Agents that it is a limited-purpose trust company organized under the laws of
the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the 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 "Exchange Act"). The Depositary was
created to hold securities of its participants and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers
(including the Agents), banks, trust companies, clearing corporations and
certain other organizations, some of whom (and/or their representatives) own
DTC. Access to DTC's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Persons who are not participants may beneficially own securities held by DTC
only through participants.
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain federal income tax consequences is based on
current law and is for general information only. The tax treatment of a holder
of a particular Note may vary depending upon his particular situation. Certain
holders of Notes (including insurance companies, tax-exempt organizations,
financial institutions, broker-dealers, foreign corporations and persons who
are not citizens or residents of the United States) may be subject to special
rules not discussed below. BECAUSE THE EXACT PRICING AND OTHER TERMS OF THE
NOTES VARY, NO ASSURANCE CAN BE GIVEN THAT THE CONSIDERATIONS DESCRIBED BELOW
WILL APPLY TO A PARTICULAR ISSUANCE OF NOTES. CERTAIN MATERIAL UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE OWNERSHIP OF PARTICULAR NOTES
(WHERE APPLICABLE) WILL BE SUMMARIZED IN THE PRICING SUPPLEMENT RELATING TO
SUCH NOTES. EACH PURCHASER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE TAX
CONSEQUENCES TO HIM OR HER OF HOLDING AND DISPOSING OF THE NOTES, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
Depending on the terms of a particular Note as set forth in the applicable
Pricing Supplement, some or all of the Notes may be issued with original issue
discount. Holders of Notes issued with original issue discount may be required
to include such original issue discount in gross income as interest income for
federal income tax purposes before receiving the cash to which such interest
income is attributable. In general, the amount of original issue discount, if
any, on a Note would be the excess of its "stated redemption price at maturity"
over its "issue price," subject to a statutorily-defined de minimis exception.
Holders of Notes issued with original issue discount must generally include in
gross income for federal income tax purposes the sum of the daily portions of
original issue discount with respect to such Notes for each day during the
taxable year or portion of a taxable year on which such holder holds the Notes.
Treasury Regulations provide that any Floating Rate Notes that (i) bear
interest such that the Floating Rate Notes qualify as "variable rate debt
instruments" (as defined in the Treasury Regulations), but do not provide for
"qualified stated interest" (as defined in the Treasury Regulations) or (ii)
bear interest such that the Floating Rate Notes do not qualify as "variable
rate debt instruments," may be treated as issued with original issue discount
or as contingent payment obligations. Even if the Floating Rate Notes would
otherwise qualify as "variable rate debt instruments," if the Floating Rate
Notes are subject to maximum or minimum interest rate limitations that are
expected to significantly alter the yield on the Notes (excluding maximum or
minimum rates that are fixed throughout the term of the Notes), the Floating
Rate Notes could be treated as contingent payment obligations for federal
income tax purposes.
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The Treasury Department has recently proposed regulations dealing with the
treatment of contingent payment obligations (the "Proposed Regulations"). These
Proposed Regulations supersede the proposed Treasury Regulations originally
published on April 8, 1986 dealing with contingent payment obligations and are
not proposed to be effective for debt instruments issued prior to the date that
is 60 days after the date on which the Proposed Regulations are finalized.
Because the Proposed Regulations represent the best indication of the current
view of the Treasury Department with respect to the federal income tax
treatment of contingent payment obligations, the Company intends to take the
position (absent any express authority to the contrary and unless otherwise
indicated) that the rules set forth in the Proposed Regulations will control
the tax treatment of any Floating Rate Note that is treated as a contingent
payment obligation, and the following discussion assumes such treatment. There
can be no assurance, however, that the final Treasury Regulations regarding
contingent payment obligations will not differ materially from the Proposed
Regulations. Accordingly, the ultimate federal income tax treatment of any
Floating Rate Note that is treated as a contingent payment obligation may
differ from that described herein.
Generally, if the Notes are treated as contingent payment obligations,
interest payments thereon will be treated as "contingent interest" payments.
Under the Proposed Regulations, any contingent interest payments on a Floating
Rate Note would be includible in income in a taxable year whether or not the
amount of any payment is fixed or determinable in that year. The amount of
interest included in income in any particular accrual period would be
determined by estimating a projected payment schedule (as determined under the
Proposed Regulations) for the Floating Rate Note and applying daily accrual
rules similar to those for accruing original issue discount on noncontingent
debt instruments issued with original issue discount (as discussed above). If
the actual amount of a contingent interest payment is not equal to the
projected amount, an adjustment to income at the time of the payment must be
made to reflect the difference.
A holder of Notes will be subject to backup withholding at the rate of 31%
with respect to interest paid on or original issue discount accrued on the
Notes unless (i) such holder is a corporation or comes within certain other
exempt categories and, when required, demonstrates this fact or (ii) provides a
correct taxpayer identification number, certifies as to no loss of exemption
from backup withholding and otherwise complies with applicable requirements of
the backup withholding rules. A holder of Notes who does not provide the
Company with his correct taxpayer identification number may be subject to
penalties imposed by the Internal Revenue Service (the "Service"). The Company
will report to holders of the Notes and the Service the amount of any
"reportable payments" (including any original issue discount accrued on the
Notes) and any amount withheld with respect to the Notes during the calendar
year.
Depending upon their specific terms when issued, the Notes may have tax
consequences different from those described above. Accordingly, prospective
purchasers are urged to review any tax discussion in the related Pricing
Supplement and consult their tax advisors with respect to the tax treatment of
the Notes.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis for sale by the Company
through each of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Goldman, Sachs & Co. (collectively, the "Agents"), who will
purchase the Notes, as principal, from the Company for resale to investors and
other purchasers at varying prices relating to prevailing market prices at the
time of resale as determined by such Agent, or, if so specified in an
applicable Pricing Supplement, for resale at a fixed public offering price.
Unless otherwise specified in an applicable Pricing Supplement, any Note sold
to an Agent as principal will be purchased by such Agent at a price equal to
100% of the principal amount thereof less a percentage of the principal amount
equal to the commission applicable to an agency sale (as described below) of a
Note of identical maturity. If agreed to by the Company and the applicable
Agent, such Agent may utilize its reasonable efforts on an agency basis to
solicit offers to purchase the Notes at 100% of the principal amount thereof,
unless otherwise specified in an applicable Pricing Supplement. The Company
will pay a commission to each such Agent, ranging from .125% to .750% of the
principal amount of a Note, depending upon its Stated Maturity, sold through
such Agent.
S-15
<PAGE>
An Agent may sell Notes it has purchased from the Company as principal to
other dealers for resale to investors, and may allow any portion of the
discount received in connection with such purchases from the Company to such
dealers. After the initial public offering of Notes, the public offering price
(in the case of Notes to be resold on a fixed public offering price basis), the
concession and the discount may be changed.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part. The Agents
will have the right, in their discretion reasonably exercised, to reject in
whole or in part any offer to purchase Notes received by them on an agency
basis.
Unless otherwise specified in an applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in New York City on the date of settlement.
No Note will have an established trading market when issued. The Notes will
not be listed on any securities exchange. Each of the Agents may from time to
time purchase and sell Notes in the secondary market, but no Agent is obligated
to do so, and there can be no assurance that there will be a secondary market
for the Notes or liquidity in the secondary market if one develops. From time
to time, the Agents may make a market in the Notes, but the Agents are not
obligated to do so and may discontinue any market-making activity at any time.
Each Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Company has
agreed to indemnify each of the Agents against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments the Agents
may be required to make in respect thereof. The Company has agreed to reimburse
each of the Agents for certain other expenses.
Concurrently with the offering of Notes through the Agents as described
herein, the Company may issue other Debt Securities pursuant to the Indenture
referred to herein.
S-16
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR IN-
CORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPEC-
TUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR
AGENT. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OF-
FER OR A SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITA-
TION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITA-
TION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET
FORTH IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Notes....................................................... S-2
Material Federal Income Tax
Considerations............................................................ S-14
Plan of Distribution....................................................... S-15
</TABLE>
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by
Reference................................................................. 2
The Company................................................................ 4
Selected Consolidated Financial Data ...................................... 7
Ratio of Earnings to Fixed Charges......................................... 7
Use of Proceeds............................................................ 8
Description of the Debt Securities......................................... 8
Description of Preferred Stock............................................. 14
Description of Common Stock................................................ 18
Plan of Distribution....................................................... 20
Legal Matters.............................................................. 21
Experts.................................................................... 21
</TABLE>
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$75,000,000
HEALTH CARE PROPERTY INVESTORS, INC.
MEDIUM-TERM NOTES, SERIES B
--------------------
PROSPECTUS SUPPLEMENT
--------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MARCH 1, 1995
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- -------------------------------------------------------------------------------
<PAGE>
Rule 424(b)(3)
Registration No. 33-66676
PRICING AND PROSPECTUS SUPPLEMENT DATED MARCH 1, 1995
HEALTH CARE PROPERTY INVESTORS, INC.
Medium-Term Notes, Series B
This Pricing and Prospectus Supplement accompanies and supplements the
Prospectus, dated February 2, 1995, as supplemented by the Prospectus
Supplement, dated March 1, 1995.
The Notes have the following terms (as applicable):
<TABLE>
<C> <C> <S>
Principal Amount: $5,000,000.00
Agent's Discount or Commission: .75%
Net Proceeds to Issuer: $4,962,500.00
Original Issue Price: 100%
Original Issue Date: March 8, 1995
Stated Maturity Date: March 10, 2015
Interest Rate Per Annum: 9.00%
Redemption Date(s): On or after March 8, 2002
Redemption Price(s): 100%, plus accrued interest
Notice of Redemption: Not more than 60 nor less than 30 days
Optional Repayment Date(s): None
Optional Repayment Price(s): Not Applicable
Notice of Optional Repayment: Not Applicable
Original Issue Discount: [ ] Yes [X] No
Form: [X] Book-Entry/Global [ ] Definitive
Agent: [ ] Merrill Lynch & Co. [X] Goldman, Sachs & Co.
</TABLE>
Agent acting in the capacity as indicated below:
[X]Agent [ ] Principal
If as Principal:
[ ] The Notes are being offered at varying prices related to
prevailing market prices at the time of resale.
[ ] The Notes are being offered at a fixed initial public
offering price of 100% of Principal Amount.
If as Agent:
The Notes are being offering at a fixed initial public offering price
of 100% of Principal Amount.
<PAGE>
Stated Interest
Based on the expected issue price of the Notes, the Company does not
anticipate that the Notes will be issued with original issue discount. Holders
of Notes will be required to include stated interest in gross income in
accordance with their method of accounting for tax purposes. Each purchaser of
Notes is encouraged to consult his or her tax advisor with respect to the tax
consequences to him or her of the acquisition, ownership and disposition of
the Notes. See "Material Federal Income Tax Considerations" in the
accompanying Prospectus Supplement.
