<PAGE>
RULE NO. 424(b)(1)
REGISTRATION NO. 33-62485
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 7, 1995
$500,000,000
PITNEY BOWES CREDIT CORPORATION
MEDIUM-TERM NOTES, SERIES C
DUE FROM 9 MONTHS TO 30 YEARS FROM DATE OF ISSUE
--------------
The Company may offer from time to time its Medium-Term Notes, Series C due
from 9 months to 30 years from the date of issue, as selected by the purchaser
and agreed to by the Company, at an aggregate initial public offering price
not to exceed $500,000,000 or its equivalent in another currency or composite
currency, subject to reduction as a result of a sale of other Debt Securities.
The Notes may be denominated in U.S. dollars or in such foreign currencies
or composite currencies as may be designated by the Company at the time of
offering. The specific currency or composite currency, interest rate (if any),
issue price and maturity date of any Note will be set forth in the related
Pricing Supplement to this Prospectus Supplement. Unless otherwise specified
in the applicable Pricing Supplement, Notes denominated in other than U.S.
dollars or ECUs will not be sold in, or to residents of, the country issuing
the Specified Currency. See "Description of Notes".
Interest on the Fixed Rate Notes will be payable on each May 15 and November
15 and at maturity or upon earlier redemption or repayment. Interest on the
Floating Rate Notes will be payable on the dates specified therein and in the
applicable Pricing Supplement. Zero Coupon Notes will not bear interest.
Unless a Redemption Commencement Date or Repayment Date is specified in the
applicable Pricing Supplement, the Notes will not be redeemable or repayable
prior to their maturity. If a Redemption Commencement Date or Redemption Date
is so specified, the Notes will be redeemable at the option of the Company or
repayable at the option of the holder as described herein.
The Notes offered hereby will be issued in global or definitive certificated
form in a minimum denomination of U.S. $100,000 or the approximate equivalent
thereof in the Specified Currency, as specified in the applicable Pricing
Supplement. A global Note representing Book-Entry Notes will be registered in
the name of the nominee of The Depository Trust Company, which will act as
Depositary. Beneficial interests in Book-Entry Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described herein under "Description
of Notes--Book-Entry Notes", owners of beneficial interests in a global Note
will not be considered the Holders thereof and will not be entitled to receive
physical delivery of Notes in definitive form, and no global Note will be
exchangeable except for another global Note of like denomination and terms to
be registered in the name of the Depositary or its nominee. See "Description
of Notes".
--------------
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, ANY PRICING SUPPLEMENT HERETO OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------
<TABLE>
<CAPTION>
PRICE TO AGENTS' DISCOUNTS OR PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(2)(3)
--------- -------------------- -------------
<S> <C> <C> <C>
Per Note............................ 100% .125% - .750% 99.250% - 99.875%
Total(4)............................ $500,000,000 $625,000 - $3,750,000 $496,250,000 - $499,375,000
</TABLE>
- -------
(1) Notes will be issued at 100% of their principal amount, unless otherwise
specified in the applicable Pricing Supplement.
(2) The Company will pay the Agents a commission of from .125% to .750%,
depending on maturity, of the principal amount of any Notes sold through
them as agents (or sold to such Agents as principal in circumstances in
which no other discount is agreed). The Company has agreed to indemnify the
Agents against certain liabilities, including liabilities under the
Securities Act of 1933. See "Supplemental Plan of Distribution".
(3) Before deducting estimated expenses of $200,000 payable by the Company,
including expenses of the Agents to be reimbursed by the Company.
(4) Or the equivalent thereof in another currency or composite currency.
--------------
Offers to purchase Notes are being solicited, on a reasonable efforts basis,
from time to time by the Agents on behalf of the Company. Notes may be sold to
the Agents on their own behalf at negotiated discounts. In addition, the
Company may arrange for the Notes to be sold through other agents, dealers or
underwriters and reserves the right to sell Notes directly on its own behalf.
The Company also reserves the right to withdraw, cancel or modify the offering
contemplated hereby without notice. No termination date for the offering of
the Notes has been established. The Company or the Agents may reject any order
as a whole or in part. See "Supplemental Plan of Distribution".
GOLDMAN, SACHS & CO.
CS FIRST BOSTON
CHASE SECURITIES, INC.
CITICORP SECURITIES, INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
NATIONSBANC CAPITAL MARKETS, INC.
--------------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS NOVEMBER 10, 1995.
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENTS MAY OVER-ALLOT
OR EFFECT TRANSACTIONS IN THE NOTES AND OTHER DEBT SECURITIES OF THE COMPANY
WITH A VIEW TO STABILIZING OR MAINTAINING THE MARKET PRICE OF THE NOTES AT
LEVELS OTHER THAN THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF NOTES
GENERAL
The following description of the particular terms of the Notes offered hereby
(referred to in the Prospectus as "Offered Debt Securities") supplements, and
to the extent inconsistent therewith replaces, the description of the general
terms and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made. Unless otherwise specified in the
applicable Pricing Supplement, the following description of the Notes will
apply.
The Notes constitute a single series for purposes of the Indenture, dated as
of November 1, 1995 (the "Indenture"), between Pitney Bowes Credit Corporation
(the "Company") and Chemical Bank, as trustee, and are limited in amount as set
forth on the cover page hereof. Capitalized terms used but not defined herein
have the meanings set forth in the Indenture. For a description of the rights
attaching to different series of Debt Securities under the Indenture, see
"Description of Debt Securities" in the Prospectus.
Pursuant to the Indenture, the Company has designated Chemical Bank as Paying
Agent and Security Registrar in respect of the Notes.
Unless previously redeemed or repaid, a Note will mature on the date (the
"Stated Maturity") from 9 months to 30 years from its date of issue that is
specified on the face thereof and in the applicable Pricing Supplement.
Each Note will be denominated in a currency or composite currency ("Specified
Currency") as specified on the face thereof and in the applicable Pricing
Supplement, which may include U.S. dollars, European Currency Units ("ECUs") or
any other currency set forth in the applicable Pricing Supplement. Purchasers
of the Notes are required to pay for them by delivery of the requisite amount
of the Specified Currency to an Agent, unless other arrangements have been
made. Unless otherwise specified in the applicable Pricing Supplement, payments
on the Notes will be made in the applicable Specified Currency, provided that,
at the election of the Holder thereof and in certain circumstances at the
option of the Company, payments on Notes denominated in other than U.S. dollars
may be made in U.S. dollars. See "Payment of Principal and Interest".
Each Note will be represented by either a global Note registered in the name
of a nominee of the Depositary (each such Note represented by a global Note
being herein referred to as a "Book-Entry Note") or a certificate issued in
definitive registered form, without coupons (a "Certificated Note"), as set
forth in the applicable Pricing Supplement. Except as set forth under "Book-
Entry Notes" below, Book-Entry Notes will not be issuable in certificated form.
So long as the Depositary or its nominee is the registered holder of any global
Note, the Depositary or its nominee, as the case may be, will be considered the
sole Holder of the Book-Entry Note or Notes represented by such global Note for
all purposes under the Indenture and the Notes. For a further description of
the respective forms, denominations and transfer and exchange procedures in
respect of any such global Note and the Book-Entry Notes, reference is made to
"Book-Entry Notes" below and to the applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of any Note denominated in U.S. dollars will be
$100,000 and integral multiples of $1,000 in excess thereof. The authorized
denominations of any Note denominated in other than U.S. dollars will be the
amount of the Specified Currency for such Note equivalent, at the noon buying
rate in The City of New York for cable transfers for such Specified Currency
(the "Exchange Rate") on the first Business Day next preceding the date on
which the Company accepts the offer to purchase such Note, to U.S. $100,000
(rounded down to an integral multiple of 1,000 units of such Specified
Currency) and any greater amount that is an integral multiple of 1,000 units of
such Specified Currency.
Notes will be sold in individual issues of Notes having such interest rate or
interest rate formula, if any, Stated Maturity and date of original issuance as
shall be selected by the initial purchasers and agreed to by the Company.
Unless otherwise indicated in the applicable Pricing Supplement, each Note,
except any zero coupon note (a "Zero Coupon Note"), will bear interest at a
fixed rate or at a floating rate determined by reference to one or more
interest rate formulas, as adjusted by the Spread or Spread Multiplier (each
term as defined below), if any, applicable to such Note. See "Interest Rate".
Zero Coupon Notes will be issued at a discount from the principal amount
payable at maturity thereof, but holders of Zero Coupon Notes will not receive
periodic payments of interest thereon.
The Notes may be issued from time to time 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 the principal amount thereof and which
may provide that upon redemption, repayment or acceleration of the maturity
thereof an amount less than the principal thereof shall become due and payable.
In the event of redemption, repayment or acceleration of the maturity of an
Original Issue Discount Note, the amount payable to the Holder of such Note
upon such redemption, repayment or acceleration will be determined in
accordance with the terms of the Note, but will be an amount less than the
amount payable at the Stated Maturity of such Note. In addition, a Note issued
at a discount may, for United States federal income tax purposes, be considered
an original issue discount Note, regardless of the amount payable upon
redemption, repayment or acceleration of maturity of such Note. See "United
States Taxation--Original Issue Discount Notes" herein.
Notes may be issued from time to time as Indexed Notes. "Indexed Notes" are
Notes issued with the principal amount payable at maturity or upon redemption
or repayment, or the amount of interest payable on an interest payment date, to
be determined by reference to a currency exchange rate, composite currency,
commodity price or other financial or non-financial index as set forth in the
applicable Pricing Supplement. Holders of Indexed Notes may receive a principal
amount at maturity that is greater than or less than the face amount of such
Notes depending upon the value at maturity of the applicable index. Information
as to the methods for determining the principal amount payable at maturity or
the amount of interest payable on an interest payment date, as the case may be,
any currency or commodity market to which principal or interest is indexed,
foreign exchange risks and certain additional tax considerations with respect
to Indexed Notes will be set forth in the applicable Pricing Supplement.
The Notes may be issued from time to time as Amortizing Notes. "Amortizing
Notes" are Notes for which payments of principal and interest are made in
installments over the life of the Notes. Unless otherwise specified in the
applicable Pricing Supplement, interest on each Amortizing Note will be
computed on the basis of a 360-day year of twelve 30-day months. Payments with
respect to Amortizing Notes will be applied first to interest due and payable
thereon and then to the reduction of the unpaid principal amount thereof.
Further information concerning additional terms and provisions of Amortizing
Notes will be specified in the applicable Pricing Supplement, including a table
setting forth repayment information for such Amortizing Notes.
Unless otherwise specified in the applicable Pricing Supplement the Notes
will not be subject to any sinking fund and, unless an initial date on which a
Note may be redeemed by the Company (a
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"Redemption Commencement Date") or a date on which a Note may be repayable at
the option of a Holder thereof (a "Repayment Date") is specified in the
applicable Pricing Supplement, will not be redeemable or repayable prior to
their Stated Maturity. If a Redemption Commencement Date or Repayment Date is
so specified with respect to any Note, the applicable Pricing Supplement will
also specify one or more redemption or repayment prices (expressed as a
percentage of the principal amount of such Note) ("Redemption Prices" or
"Repayment Prices", respectively) and the redemption or repayment period or
periods ("Redemption Periods" or "Repayment Periods", respectively) during
which such Redemption Prices or Repayment Prices shall apply. Unless otherwise
specified in the Pricing Supplement, any such Note shall be redeemable at the
option of the Company or repayable at the option of the Holder thereof (as
specified in such Pricing Supplement) at any time on or after such specified
Redemption Commencement Date or Repayment Date, as the case may be, for a
limited period (as specified in such Pricing Supplement) at the specified
Redemption Price or Repayment Price applicable to the Redemption Period or
Repayment Period during which such Note is to be redeemed or repaid, together
with interest accrued to the redemption date or repayment date.
Only the Depositary may exercise the repayment option in respect of Book-
Entry Notes. Accordingly, beneficial owners of Book-Entry Notes that desire to
have all or any portion of the Book-Entry Notes repaid must instruct the
participant through which they own their interest to direct the Depositary to
exercise the repayment option on their behalf by delivering the related global
Note and duly completed election form to the Trustee. In order to ensure that
such global Note and election form are received by the Trustee on a particular
day, the applicable beneficial owner must so instruct the participant through
which it owns its interest before such participant's deadline for accepting
instructions for that day. Different firms may have different deadlines for
accepting instructions from their customers. Accordingly, beneficial owners
should consult the participants through which they own their interest for the
respective deadlines for such participants. All instructions given to
participants from beneficial owners of Book-Entry Notes relating to the option
to elect repayment shall be irrevocable. In addition, at the time such
instructions are given, each such beneficial owner shall cause the participant
through which it owns its interest to transfer such beneficial owner's interest
in the Book-Entry Note, on the Depositary's records, to the Trustee.
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934 (the "Exchange Act"), 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, at the discretion
of the Company, be held, resold or surrendered to the Trustee for cancellation.
The Pricing Supplement relating to each Note will describe the following
terms; (i) the Specified Currency with respect to such Note (and, if such
Specified Currency is other than U.S. dollars, certain other terms relating to
such Note, including the authorized denominations and the Exchange Rate Agent
(as defined below)); (ii) the price (expressed as a percentage of the aggregate
principal amount thereof) at which such Note will be issued; (iii) the date on
which such Note will be issued; (iv) the date on which such Note will mature;
(v) whether such Note is a Fixed Rate Note or a Floating Rate Note (each term,
as defined below); (vi) if such Note is a Fixed Rate Note, the rate per annum
at which such Note will bear interest, if any, and the interest payment date or
dates, if different from those set forth below; (vii) if such Note is a
Floating Rate Note, the interest rate basis (the "Interest Rate Basis") for
each such Floating Rate Note and, if applicable, the Calculation Agent, the
Index Maturity, the Spread or Spread Multiplier, the Maximum Rate, the Minimum
Rate, the Initial Interest Rate, the Interest Payment Dates, the Regular Record
Dates, the Calculation Date, the Interest Determination Date and the Interest
Reset Date (each term, as defined below) with respect to such Floating Rate
Note; (viii) whether such Note is an Original Issue Discount Note, and if so,
the yield to maturity; (ix) whether such Note is an Indexed Note, and if so,
the principal amount thereof payable at Stated Maturity, or the
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amount of interest payable on an Interest Payment Date, as determined by
reference to the applicable index, in addition to certain other information
relating to the Indexed Note; (x) whether such Note is an Amortizing Note, and
if so, repayment information with respect to installments of principal and
interest; (xi) whether such Note may be redeemed at the option of the Company,
or repaid at the option of the holder, prior to the Stated Maturity and, if
so, the provisions relating to such redemption or repayment; (xii) whether
such Note will be issued initially as a Book-Entry Note or a Certificated
Note; and (xiii) any other terms of such Note not inconsistent with the
provisions of the Indenture.
Certificated Notes may be presented for registration of transfer or exchange
at the Corporate Trust Office of the Security Registrar in the Borough of
Manhattan, The City of New York.
The provisions of the Indenture relating to defeasance and discharge and
covenant defeasance, which are described in the accompanying Prospectus under
"Defeasance and Discharge" and "Defeasance of Certain Covenants" under the
caption "Description of Debt Securities", will apply to the Notes. Under
current federal income tax law, such defeasance and discharge of the Company's
payment obligations with respect to the Notes would be treated as a taxable
exchange of the Notes for an issue of obligations of the defeasance trust or a
direct interest in the cash and securities deposited in such trust. In that
case, beneficial owners of the Notes would recognize gain or loss as if the
trust obligations or the cash or securities deposited, as the case may be, had
actually been received by them in exchange for their Notes. A beneficial owner
thereafter would be required to include in income an amount that might be
different from what would be includable in the absence of defeasance and
discharge. Under current federal income tax law, unless accompanied by other
changes in the terms of the Notes, covenant defeasance would not be treated as
a taxable exchange.
INTEREST RATE
Each Note, other than a Zero Coupon Note, will bear interest from and
including its date of issue or from the most recent Interest Payment Date to
which interest on such Note has been paid or duly provided for at the fixed
rate per annum, or at the rate per annum determined 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 on each Interest Payment Date and at maturity or upon earlier
redemption or repayment as specified below under "Payment of Principal and
Interest".
Each Note, other than a Zero Coupon Note, will bear interest at either (a) a
fixed rate (a "Fixed Rate Note") or (b) a variable rate determined by
reference to an interest rate formula (a "Floating Rate Note"), which may be
adjusted by adding or subtracting the Spread or multiplying by the Spread
Multiplier. A Floating Rate Note may also have either or both of the
following: (a) a maximum numerical interest rate limitation, or ceiling, on
the rate of interest which may accrue during any interest period (a "Maximum
Rate"); and (b) a minimum numerical interest rate limitation, or floor, on the
rate of interest which may accrue during any interest period (a "Minimum
Rate"). The "Spread" is the number of basis points specified in the applicable
Pricing Supplement as being applicable to the Interest Rate Basis for such
Note and the "Spread Multiplier" is the percentage specified in the applicable
Pricing Supplement as being applicable to the Interest Rate Basis for such
Note. "Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law, regulation or executive order to close in The City of New
York; provided, however, that, with respect to Notes that payment of which is
to be made in a currency or composite currency other than U.S. dollars, such
day is also not a day on which banking institutions are authorized or required
by law, regulation or executive order to close in the Principal Financial
Center (as defined below) of the country issuing such currency or composite
currency (or, in the case of ECUs, is not a day that is a non-ECU clearing day
as determined by the ECU Banking Association in Paris); provided, further,
that, with respect to LIBOR Notes (as defined below), such day is also a
London Business Day (as defined below). "London Business Day" means (i) if the
Index Currency (as defined below) is other
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than ECU, any day on which dealings in such Index Currency are transacted in
the London interbank market or (ii) if the Index Currency is ECU, any day that
is not a non-ECU clearing day as determined by the ECU Banking Association in
Paris. "Index Maturity" means, with respect to a Floating Rate Note, the period
to maturity of the instrument or obligation on which the interest rate formula
is based, as specified in the applicable Pricing Supplement. Unless otherwise
provided in the applicable Pricing Supplement, Chemical Bank will be the
calculation agent (the "Calculation Agent") with respect to the Floating Rate
Notes.
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Fixed Rate Note.
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an Interest Rate Basis for such Floating Rate Note. The Interest Rate
Basis for each Floating Rate Note will be one or more of the following: (a) the
Commercial Paper Rate, in which case such Note will be a Commercial Paper Rate
Note; (b) the Prime Rate, in which case such Note will be a Prime Rate Note;
(c) LIBOR, in which case such Note will be a LIBOR Note; (d) the Treasury Rate,
in which case such Note will be a Treasury Rate Note; (e) the CD Rate, in which
case such Note will be a CD Rate Note; (f) the Federal Funds Rate, in which
case such Note will be a Federal Funds Rate Note; or (g) such other Interest
Rate Basis as is set forth in such Pricing Supplement.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semi-annually, annually or otherwise (each an "Interest
Reset Date"), as specified in the applicable Pricing Supplement. Unless
otherwise specified in the applicable Pricing Supplement, the Interest Reset
Date will be, in the case of Floating Rate Notes that reset daily, each
Business Day, in the case of Floating Rate Notes (other than Treasury Rate
Notes) which reset weekly, the Wednesday of each week; in the case of Treasury
Rate Notes which reset weekly, the Tuesday of each week (except as provided
below); in the case of Floating Rate Notes which reset monthly, the third
Wednesday of each month; in the case of Floating Rate Notes which reset
quarterly, the third Wednesday of March, June, September and December; in the
case of Floating Rate Notes which reset semi-annually, the third Wednesday of
two months of each year as specified in the applicable Pricing Supplement; and
in the case of Floating Rate Notes which reset annually, the third Wednesday of
one month of each year as specified in the applicable Pricing Supplement;
provided, however, that the interest rate in effect from the date of issue to
the first Interest Reset Date with respect to a Floating Rate Note will be the
Initial Interest Rate (as set forth 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 with respect to such Floating Rate Note, the
Interest Reset Date for such Floating Rate Note shall be postponed to the next
day that is a Business Day with respect to such Floating Rate Note, except that
in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), for a Prime Rate Note (the "Prime Rate Interest Determination Date"),
for a CD Rate Note (the "CD Rate Interest Determination Date") and for a
Federal Funds Rate Note (the "Federal Funds Rate Interest Determination Date")
will be the second Market Day preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note (the
"LIBOR Interest Determination Date") will be the second London Business Day
immediately preceding the applicable Interest Reset Date, unless the Index
Currency is British pounds sterling, in which case the Interest Determination
Date will be the applicable Interest Reset Date. The Interest Determination
Date pertaining to an Interest Reset Date for a Treasury Rate Note (the
"Treasury Interest Determination Date") will be the day of the week in which
such Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on the 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. If, as the result of a legal holiday, an auction is so held
on the preceding Friday, such Friday will
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be the Treasury Interest Determination Date pertaining to the Interest Reset
Date occurring in the next succeeding week. If an auction date shall fall on
any Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date
shall instead be the first Business Day immediately following such auction
date.
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 amounts used in
or resulting from such calculation on Floating Rate Notes will be rounded, in
the case of U.S. dollars, to the nearest cent or, in the case of a foreign
currency or composite currency, to the nearest unit (with one-half cent or unit
being rounded upwards).
In addition to any maximum interest rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on the
Floating Rate Notes will in no event be higher than the maximum rate permitted
by New York law, as the same may be modified by United States law of general
application. Under present New York law the maximum rate of interest is 25% per
annum on a simple interest basis, with certain exceptions. The limit may not
apply to Floating Rate Notes in which U.S. $2,500,000 or more has been
invested.
Upon the 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 which will become effective on the next Interest Reset Date with
respect to such Floating Rate Note. The Calculation Agent's determination of
any interest rate will be final and binding in the absence of manifest error.
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 immediately preceding the applicable
Interest Payment Date or the maturity date, as the case may be.
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread or
Spread Multiplier, if any), and will be payable on the dates, specified on the
face of the Commercial Paper Rate Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Reset Date, the Money Market
Yield (calculated as described below) of the per annum rate (quoted on a bank
discount basis) as of the relevant Commercial Paper Interest Determination Date
for commercial paper having the specified Index Maturity 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 of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading
"Commercial Paper". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the Commercial
Paper Rate with respect to such Interest Reset Date shall be the Money Market
Yield of such rate on such Commercial Paper Interest Determination Date for
commercial paper having the specified Index Maturity 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 published by the Federal Reserve Bank of New York ("Composite
Quotations") under the heading "Commercial Paper". If by 3:00 P.M., New York
City time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, the Commercial Paper Rate with respect to
such Interest Reset Date shall be calculated by the Calculation Agent and shall
be the Money Market
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Yield of the arithmetic mean of the offered per annum rates (quoted on a bank
discount basis), as of 11:00 A.M., New York City time, on such Commercial Paper
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 of the specified Index Maturity placed for an
industrial issuer whose bond rating is "AA", or the equivalent, from a
nationally recognized rating agency; provided, however, that if fewer than
three dealers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Commercial Paper Rate with respect to such
Interest Reset Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
360 X D
Money Market Yield = 100 X -------------------
360 - (D X M)
where "D" refers to the 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 period for which accrued interest is being calculated.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rates (calculated with
reference to the Prime Rate and the Spread or Spread Multiplier, if any), and
will be payable on the dates, specified on the face of the Prime Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Interest Reset Date, the rate set forth for the
relevant Prime Rate Interest Determination Date in H.15(519) under the heading
"Bank Prime Loan". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the Prime Rate
with respect to such Interest Reset Date will be the arithmetic mean of the
rates of interest publicly announced by each bank that appears on the display
designated as page "USPRIME1" on the Reuters Monitor Money Rates Service (or
such other page as may replace the USPRIME1 page on that service for the
purpose of displaying prime rates or base lending rates of major United States
banks) ("Reuters Screen USPRIME1 Page") as such bank's prime rate or base
lending rate as in effect for such Prime Rate Interest Determination Date. If
fewer than four such rates appear on the Reuters Screen USPRIME1 Page on such
Prime Rate Interest Determination Date, the Prime Rate with respect to such
Interest Reset Date will be the arithmetic mean of the prime rates or base
lending 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 three substitute banks or trust companies
organized and doing business under the laws of the United States, or any State
thereof, having total equity capital of at least U.S. $500,000,000 and being
subject to supervision or examination by federal or state authority, selected
by the Calculation Agent after consultation with the Company; provided,
however, that if fewer than three banks selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the Prime Rate
with respect to such Interest Reset Date will be the Prime Rate in effect on
such Prime Rate Interest Determination Date.
LIBOR NOTES
LIBOR Notes will bear interest at the interest rates (calculated with
reference to the London interbank offered rate ("LIBOR") and the Spread or
Spread Multiplier, if any), and will be payable on the dates specified on the
face of the LIBOR Note and in the applicable Pricing Supplement.
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Unless otherwise indicated in the applicable Pricing Supplement, LIBOR with
respect to any Interest Reset Date will be determined by the Calculation Agent
in accordance with the following provisions:
(i) With respect to 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 Designated
LIBOR Page (as defined below) by its terms provides only for a single rate,
in which case such single rate shall be used) for deposits in the Index
Currency having the Index Maturity specified in such Pricing Supplement,
commencing on the applicable Interest Reset Date, that appear (or, if only
a single rate is required as aforesaid, appears) on the Designated LIBOR
Page as of 11:00 A.M., London time, on such LIBOR Interest Determination
Date, or (b) if "LIBOR Telerate" is specified in the applicable Pricing
Supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified
in the applicable Pricing Supplement as the method of calculating LIBOR,
the rate for deposits in the Index Currency having the Index Maturity
specified in such Pricing Supplement, commencing on such Interest Reset
Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London
time, on such LIBOR Interest Determination Date. If fewer than two such
offered rates appear, of if no such rate appears, as applicable, LIBOR on
such LIBOR Interest Determination Date will be determined in accordance
with the provisions described in clause (ii) below.
(ii) If LIBOR with respect to a LIBOR Interest Determination Date is to
be determined pursuant to this clause (ii), 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 the Index Currency for the period of the
Index Maturity designated in the applicable Pricing Supplement, commencing
on the Interest Reset 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 such Index Currency 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 arithmetic mean of the rates quoted at
approximately 11:00 A.M., or such other time specified in the applicable
Pricing Supplement, in the applicable Principal Financial Center, on such
LIBOR Interest Determination Date by three major banks in such Principal
Financial Center selected by the Calculation Agent after consultation with
the Company for loans in the Index Currency 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 such Index Currency 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 (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the display on the Reuter Monitor Money Rates
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency, or (b) if
"LIBOR Telerate" is specified in the applicable Pricing Supplement or neither
"LIBOR Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing
Supplement as the method for calculating LIBOR, the display on the Dow Jones
Telerate Service (or any successor service) for the purpose of displaying the
London interbank rates of major banks for the applicable Index Currency.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be United States dollars.
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"Principal Financial Center" means the capital city of the country issuing
the currency or composite currency in which any payment in respect of the
relevant Notes is to be made or, solely with respect to the calculation of
LIBOR, the Index Currency, except that with respect to U.S. dollars, Deutsche
marks, Italian lira, Swiss francs, Dutch guilders and ECUs, the Principal
Financial Center shall be The City of New York, Frankfurt, Milan, Zurich,
Amsterdam and Brussels, respectively.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates (calculated with
reference to the Treasury Rate and the Spread or Spread Multiplier, if any) and
will be payable on the dates specified on the face of the Treasury Rate Note
and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Reset Date, the rate for the auction
on the relevant Treasury Interest Determination Date of direct obligations of
the United States ("Treasury Bills") having the specified Index Maturity as
published in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so published by 9:00 A.M., New
York City time, on the relevant 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) for such auction as otherwise
announced by the United States Department of the Treasury. In the event that
the results of such auction of Treasury Bills having the specified Index
Maturity are not published or reported as provided above by 3:00 P.M., New York
City time, on such Calculation Date, or if no such auction is held during such
week, then the Treasury Rate shall be the rate set forth in H.15(519) for the
relevant Treasury Interest Determination Date for the specified Index Maturity
under the heading "U.S. Government Securities/Treasury Bills/Secondary Market".
In the event such rate is not so published by 3:00 P.M., New York City time, on
the relevant Calculation Date the Treasury Rate with respect to such Interest
Reset Date shall be calculated by the Calculation Agent and shall 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 Interest Determination Date, of three primary United
States government securities dealers in The City of New York selected by the
Calculation Agent after consultation with the Company for the issue of Treasury
Bills with a remaining maturity closest to the specified Index Maturity;
provided, however, that if fewer than three dealers selected as aforesaid by
the Calculation Agent are quoting as mentioned in this sentence, the Treasury
Rate with respect to such Interest Reset Date will be the Treasury Rate in
effect on such Treasury Interest Determination Date.
CD RATE NOTES
CD Rate Notes will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any), and will
be payable on the dates, specified on the face of the CD Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Reset Date, the rate for the relevant CD
Rate Interest Determination Date for negotiable certificates of deposit having
the specified Index Maturity as published in H.15(519) under the heading "CDs
(Secondary Market)". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date, then the CD Rate
with respect to such Interest Reset Date shall be the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit having the
specified Index Maturity as published in Composite Quotations under the heading
"Certificates of Deposit". If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, the CD Rate with respect to such Interest Reset Date shall be
calculated by the Calculation Agent and shall be the arithmetic mean of the
secondary
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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 of negotiable
U.S. 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 with a
remaining maturity closest to the specified Index Maturity in a denomination of
U.S. $5,000,000; provided, however, that if fewer than three dealers selected
as aforesaid by the Calculation Agent are quoting as mentioned in this
sentence, the CD Rate with respect to such Interest Reset Date will be the CD
Rate in effect on such CD Rate Interest Determination Date.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates (calculated
with reference to the Federal Funds Rate and the Spread or Spread Multiplier,
if any), and will be payable on the dates specified on the face of the Federal
Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Reset Date, the rate on the
relevant Federal Funds Rate Interest Determination Date for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)". In the
event that such rate is not published prior to 9:00 A.M., New York City time,
on the relevant Calculation Date, then Federal Funds Rate with respect to such
Interest Reset Date will be 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 such
Calculation Date such rate is not published in either H.15(519) or Composite
Quotations, the Federal Funds Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean
of the rates, as of 9:00 A.M., New York City time, on such Federal Funds Rate
Interest Determination Date, for the last transaction in overnight 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; provided, however, that if fewer than three brokers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the Federal Funds Rate with respect to such Interest Reset Date will be the
Federal Funds Rate in effect on such Federal Funds Rate Interest Determination
Date.
PAYMENT OF PRINCIPAL AND INTEREST
Payments of principal of (and premium, if any) and interest on all Book-Entry
Notes will be payable in accordance with the procedures described below under
"Book-Entry Notes". Unless otherwise specified in the applicable Pricing
Supplement, payments of principal of (and premium, if any) and interest on all
Notes will be made in the applicable Specified Currency; provided, however,
that payments of principal (and premium, if any) and interest on Notes
denominated in other than U.S. dollars will nevertheless be made in U.S.
dollars (i) with respect to Certificated Notes, at the option of the Holders
thereof under the procedures described in the two following paragraphs and (ii)
with respect to any Notes, at the option of the Company in the case of
imposition of exchange controls or other circumstances beyond the control of
the Company as described in the last paragraph under this heading. If specified
in the applicable Pricing Supplement, the amount of principal payable on the
Notes therein described will be determined by reference to an index or formula.
Unless otherwise specified in the applicable Pricing Supplement, and except
as provided in the next paragraph, payments of interest and principal (and
premium, if any) with respect to any Certificated Note denominated in other
than U.S. dollars will be made in U.S. dollars if the registered Holder of such
Note on the relevant Regular Record Date, or at maturity or upon earlier
redemption or repayment, as the case may be, has transmitted a written request
for such payment in U.S. dollars to the Paying Agent at its Corporate Trust
Office in The City of New York on or prior to such Regular Record Date, or the
date 15 days prior to maturity, redemption or repayment, as the case may be.
Such request may be in
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writing (mailed or hand delivered) or by cable, telex or other form of
facsimile transmission. Any such request made with respect to any Certificated
Note by a registered Holder will remain in effect with respect to any further
payments of interest and principal (and premium, if any) with respect to such
Note payable to such Holder, unless such request is revoked on or prior to the
relevant Regular Record Date or the date 15 days prior to maturity or
redemption, as the case may be. Holders of Certificated Notes denominated in
other than U.S. dollars whose Notes are registered in the name of a broker or
nominee should contact such broker or nominee to determine whether and how an
election to receive payments in U.S. dollars may be made.
Unless otherwise specified in the applicable Pricing Supplement, the U.S.
dollar amount to be received by a Holder of a Note (including a Book-Entry
Note) denominated in other than U.S. dollars who elects to receive payment in
U.S. dollars will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent (as defined below) as of 11:00 A.M. New
York City time on the second Business Day next preceding the applicable payment
date from three recognized foreign exchange dealers (one of which may be the
Exchange Rate Agent) for the purchase by the quoting dealer of the Specified
Currency for U.S. dollars for settlement on such payment date in the aggregate
amount of the Specified Currency payable to all Holders of Notes electing to
receive U.S. dollar payments and at which the applicable dealer commits to
execute a contract. If three such bid quotations are not available on the
second Business Day preceding the date of payment of principal (and premium, if
any) or interest with respect to any Note, such payment will be made in the
Specified Currency. All currency exchange costs associated with any payment in
U.S. dollars on any such Note will be borne by the Holder thereof by deductions
from such payment. The Exchange Rate Agent (the "Exchange Rate Agent") with
respect to a Note will be specified in the applicable Pricing Supplement.
Interest, and in the case of Amortizing Notes, principal, will be payable to
the person in whose name a Note is registered (which in the case of global
Notes representing Book-Entry Notes, will be the Depositary or a nominee of the
Depositary) at the close of business on the Regular Record Date next preceding
each Interest Payment Date, provided, however, that interest payable at Stated
Maturity or upon earlier redemption or repayment will be payable to the person
to whom principal shall be payable (which in the case of global Notes
representing Book-Entry Notes, will be the Depositary or a nominee of the
Depositary). The first payment of interest, and in the case of Amortizing
Notes, principal, on any Note originally issued 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 on
such next succeeding Regular Record Date. Unless otherwise indicated in the
applicable Pricing Supplement, the "Regular Record Date" with respect to any
Floating Rate Note shall be the date 15 calendar days prior to each Interest
Payment Date, whether or not such date shall be a Business Day, and the
"Regular Record Date" with respect to any Fixed Rate Note shall be the May 1
and November 1 next preceding the May 15 and November 15 Interest Payment
Dates.
Unless otherwise indicated in the applicable Pricing Supplement and except as
provided below, interest will be payable, in the case of Floating Rate Notes
which reset daily, weekly or monthly, on the third Wednesday of each month or
on the third Wednesday of March, June, September and December of each year (as
indicated in the applicable Pricing Supplement); in the case of Floating Rate
Notes which reset quarterly, on the third Wednesday of March, June, September
and December of each year; in the case of Floating Rate Notes which reset semi-
annually, on the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and in the case of Floating Rate Notes which
reset annually, on the third Wednesday of the month specified in the applicable
Pricing Supplement (each an "Interest Payment Date"), and in each case, at
maturity or upon earlier redemption or repayment. If an Interest Payment Date
(other than at maturity, redemption or repayment) with respect to any Floating
Rate Note would otherwise fall on a day that is not a Business Day with respect
to such Note, such Interest Payment Date will be postponed to the next
succeeding Business Day (or, in the case of a LIBOR Note, if such day falls in
the next calendar month, the next preceding
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Business Day). If the maturity date (or date of redemption or repayment) of a
Floating Rate Note falls on a day that is not a Business Day, the required
payment of principal, premium, if any, and interest will be made on the next
succeeding Business Day (or, in the case of a LIBOR Note, if such day falls in
the next calendar month, the next preceding Business Day) as if made on the
date such payment was due, and no interest will accrue on such payment for the
period from and after the maturity date (or date of redemption or repayment) to
the date of such payment on the next succeeding Business Day.
Payments of interest on any Fixed Rate Note or Floating Rate Note with
respect to any Interest Payment Date will include interest accrued to but
excluding such Interest Payment Date or date of maturity, redemption or
repayment, as the case may be.
With respect to a Floating Rate Note, accrued interest from the date of issue
or from the last date to which interest has been paid is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the date of issue, or from the last date to which
interest has been paid, to but excluding the date for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for each such
day is computed by dividing the interest rate (expressed as a decimal)
applicable to such date by 360, in the case of Commercial Paper Rate Notes,
Prime Rate Notes, LIBOR Notes, CD Rate Notes or Federal Funds Rate Notes, or by
the actual number of days in the year, in the case of Treasury Rate Notes.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
If any Interest Payment Date or the maturity date (or the date of redemption
or repayment) of a Fixed Rate Note falls on a day that is not a Business Day,
the required payment of principal, premium, if any, and/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 such payment for the period from and
after such Interest Payment Date or the maturity date (or date of redemption or
repayment), as the case may be, to the date of such payment on the next
succeeding Business Day.
Payment of the principal of (and premium, if any) and any interest due with
respect to any Certificated Note at maturity or upon redemption or repayment to
be made in U.S. dollars will be made in immediately available funds upon
surrender of such Note at the Corporate Trust Office of the Paying Agent in the
Borough of Manhattan, The City of New York, provided that the Note is presented
to the Paying Agent in time for the Paying Agent to make such payments in such
funds in accordance with its normal procedures. Payments of interest with
respect to Certificated Notes to be made in U.S. dollars other than at maturity
or upon earlier redemption or repayment will be made by check mailed to the
address of the Person entitled thereto as it appears in the Security Register
or by wire transfer to such account as may have been appropriately designated
by such Person to the Paying Agent at least five days prior to the Interest
Payment Date by such Person. Payments in respect of Book-Entry Notes are
discussed below under "Book-Entry Notes".
Unless otherwise specified in the applicable Pricing Supplement, payments of
interest and principal (and premium, if any) with respect to any Certificated
Note to be made in a Specified Currency other than U.S. dollars will be made by
wire transfer in immediately available funds to such account with a bank
located in the country issuing the Specified Currency (or, with respect to
Certificated Notes denominated in ECUs, an ECU account) or other jurisdiction
acceptable to the Company and the Paying Agent as shall have been designated at
least five days prior to the Interest Payment Date or maturity, redemption or
repayment date, as the case may be, by the registered Holder of such Note on
the relevant Regular Record Date or maturity, redemption or repayment date,
provided that, in the case of payment of principal of (and premium, if any) and
any interest due at maturity or upon earlier redemption or repayment, the
Certificated Note is presented to the Paying Agent in time for the Paying Agent
to make such payments in such funds in accordance with its normal procedures.
Such designation shall be made by filing the appropriate information with the
Paying Agent at its Corporate Trust Office in The
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City of New York, and, unless revoked, any such designation made with respect
to any Certificated Note by a registered Holder will remain in effect with
respect to any further payments with respect to such Note payable to such
Holder. If a payment with respect to any such Note cannot be made by wire
transfer because the required designation has not been received by the Paying
Agent on or before the requisite date or for any other reason, a notice will be
mailed to the Holder at its registered address requesting a designation
pursuant to which such wire transfer can be made and, upon the Paying Agent's
receipt of such a designation, such payment will be made within five days of
such receipt. The Company will pay any administrative costs imposed by banks in
connection with making payments by wire transfer, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holders of the
Certificated Notes in respect of which payments are made.
If the principal of (and premium, if any) or interest on any Note (including
any Book-Entry Note) is payable in other than U.S. dollars and such Specified
Currency is not available due to the imposition of exchange controls or other
circumstances beyond the control of the Company, the Company will be entitled
to satisfy its obligations to Holders of the Notes by making such payment in
U.S. dollars on the basis of the most recently available Exchange Rate. Any
payment made under such circumstances in U.S. dollars where the required
payment is in other than U.S. dollars will not constitute an Event of Default
under the Indenture.
OTHER/ADDITIONAL PROVISIONS; ADDENDA
Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the maturity date or any other term relating thereto, may be modified and/or
supplemented as specified under "Other/Additional Provisions" on the face
thereof or in an Addendum relating thereto, if so specified on the face
thereof. Such provisions will be described in the applicable Pricing
Supplement.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes bearing interest (if any) at the same
rate or pursuant to the same formula and having the same date of issuance,
redemption provisions, if any, Specified Currency, Stated Maturity and other
terms will be represented by a single global Note. Each global Note
representing Book-Entry Notes will be deposited with, or on behalf of, The
Depository Trust Company, as Depositary (the "Depositary"), located in the
Borough of Manhattan, The City of New York, and will be registered in the name
of the Depositary or a nominee of the Depositary.
Upon the issuance of a global Note, the Depositary for such global Note or
its nominee will credit the accounts of persons held with it with the
respective principal or face amounts of the Book-Entry Notes represented by
such global Note. Such accounts shall be designated by the Agents with respect
to Book-Entry Notes or by the Company if such Notes are offered and sold
directly by the Company. Ownership of beneficial interests in a global Note
will be limited to participants and to persons that may hold interests through
institutions that have accounts with the Depositary ("participants"). Ownership
of beneficial interests by participants in a global Note will be shown on, and
the transfer of that ownership interest will be effected only through, records
maintained by the Depositary or its nominee for such global Note. Ownership of
beneficial interests in such global Note by persons that hold through
participants will be shown on, and the transfer of that ownership interest
within such participant will be effected only through, records maintained by
such participant.
The total amount of any principal, premium, if any, and interest due on any
global Note representing one or more Book-Entry Notes on any Interest Payment
Date or at maturity (or at redemption or repayment) will be made available to
the Trustee on such date. As soon as possible thereafter, the Trustee will make
such payments to the Depositary. None of the Company, the Trustee, the Paying
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Agent or any agent of the Company or the Trustee will have any responsibility
or liability for any aspect of the Depositary's records relating to or payments
made on account of beneficial ownership interests in a global Note representing
any Book-Entry Notes or for maintaining, supervising or reviewing any of the
Depositary's records relating to such beneficial ownership interests.
With respect to any Book-Entry Note denominated in a Specified Currency other
than U.S. dollars, the Depositary currently has elected to have payments of
principal (and premium, if any) and interest on such Note made in U.S. dollars
unless notified by any of its participants through which an interest in such
Note is held that it elects to receive such payment of principal (or premium,
if any) or interest in such Specified Currency. Unless otherwise specified in
the applicable Pricing Supplement, a beneficial owner of Book-Entry Notes
denominated in a Specified Currency other than U.S. dollars electing to receive
payments of principal or any premium or interest in a currency other than U.S.
dollars must notify the participant through which its interest is held on or
prior to the applicable Record Date, in the case of a payment of interest, and
on or prior to the sixteenth day prior to the maturity date, in the case of
principal or premium, of such beneficial owner's election to receive all or a
portion of such payment in such Specified Currency. Such participant must
notify the Depositary of such election on or prior to the third Business Day in
The City of New York after such Record Date or after such sixteenth day. The
Depositary will notify the Trustee of such election on or prior to the fifth
Business Day in The City of New York after such Record Date or after such
sixteenth day. If complete instructions are received by the participant and
forwarded by the participant to the Depositary and by the Depositary to the
Trustee, on or prior to such dates, the beneficial owner will receive payments
in the Specified Currency.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of or any premium or interest on any such global Note, the
Depositary will immediately credit, on its book-entry registration and transfer
system, the accounts of participants with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such global
Note as shown on the records of the Depositary. The accounts to be credited
shall be designated by the soliciting agent or, to the extent that such Notes
are offered and sold directly, by the Company. Payments by participants to
owners of beneficial interests in a global Note held through such participants
will be governed by standing instructions and customary practices, as is now
the case with securities held for customer accounts registered in "street
name", and will be the sole responsibility of such participants.
No global Note described above may be transferred except as a whole by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor of the
Depositary or a nominee of such successor.
Unless otherwise specified in the applicable Pricing Supplement, a global
Note representing Book-Entry Notes is exchangeable for definitive Notes in
registered form, bearing interest (if any) at the same rate or pursuant to the
same formula, having the same date of issuance, redemption provisions, if any,
Specified Currency, Stated Maturity and other terms and of differing
denominations aggregating a like amount, if (x) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for such
global Note or if at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act (y) the Company in its sole discretion
determines that all such global Notes shall be exchangeable for definitive
Notes in registered form or (z) any event shall have occurred and be continuing
which after notice or lapse of time, or both, would become an Event of Default
with respect to the Notes. Such definitive Notes shall be registered in the
names of the owners of the beneficial interests in such global Note as provided
by the Depositary's relevant participants (as identified by the Depositary
holding such global Note). Subject to the foregoing, the global Note is not
exchangeable, except for a global Note of like denomination to be registered in
the name of the Depositary or its nominee.
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So long as the Depositary for a global Note, or its nominee, is the
registered owner of such global Note, such Depositary or such nominee, as the
case may be, will be considered the sole owner or Holder of Book-Entry Notes
represented by such global Note for the purposes of receiving payment on the
Notes, receiving notices and for all other purposes under the Indenture and the
Notes. Except as provided above, owners of beneficial interests in such a
global Note will not be entitled to receive physical delivery of Notes in
definitive form and will not be considered the Holders thereof for any purpose
under the indenture. Accordingly, each person owning a beneficial interest in
such a global Note must rely on the procedures of the Depositary and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a Holder under the
Indenture. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a global Note.
The Indenture provides that the Depositary, as a Holder, may appoint agents
and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under the Indenture. The Company understands
that under existing industry practices, in the event that the Company requests
any action of Holders or that an owner of a beneficial interest in such a
global Note desires to give or take any action which a Holder is entitled to
give or take under the Indenture, the Depositary would authorize the
participants holding the relevant beneficial interests to give or take such
action, and such participants would authorize beneficial owners owning through
such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
The Depositary has advised the Company that the Depositary 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 New York Uniform Commercial Code, and a "clearing agency"
registered under the Exchange Act. The Depositary was created to hold the
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. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations some of whom
(and/or their representatives) own the Depositary. Access to the Depositary'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.
THE PAYING AGENT, SECURITY REGISTRAR AND CALCULATION AGENT
Chemical Bank maintains a banking relationship with the Company.
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UNITED STATES TAXATION
The following summary accurately describes the principal United States
federal income tax consequences of ownership and disposition of the Notes to
initial holders purchasing Notes at the "issue price" (as defined below). This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), administrative pronouncements, judicial decisions and
existing and proposed Treasury Regulations, including regulations concerning
the treatment of debt instruments issued with original issue discount (the "OID
Regulations"), changes to any of which subsequent to the date of this
Prospectus may affect the tax consequences described herein. This summary
discusses only Notes held as capital assets within the meaning of Section 1221
of the Code. It does not discuss all of the tax consequences that may be
relevant to a holder in light of his particular circumstances or to holders
subject to special rules, such as certain financial institutions, insurance
companies, dealers in securities or foreign currencies, persons holding Notes
as a hedge against, or which are hedged against, currency risks, or United
States Holders (as defined below) whose functional currency (as defined in Code
Section 985) is not the U.S. dollar. Special rules applicable to any Notes
denominated in a currency or composite currency other than United States
dollars will be described in the applicable Pricing Supplement. Finally, this
summary does not discuss Original Issue Discount Notes which qualify as
"applicable high-yield discount obligations" under Section 163(i) of the Code.
Holders of Original Issue Discount Notes that are "applicable high-yield
discount obligations" may be subject to special rules. Persons considering the
purchase of Notes should consult their tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "United States Holder" means a beneficial owner of a
Note that (a) is (i) for United States federal income tax purposes a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof, or (iii) an estate or trust the income of which
is subject to United States federal income taxation regardless of its source,
or (b) is not otherwise a United States Holder but whose income from a Note is
effectively connected with such Holder's conduct of a United States trade or
business. The term also includes certain former citizens of the United States.
As used herein, the term "United States Alien Holder" means an owner of a
Note that is, for United States federal income tax purposes, (i) a nonresident
alien individual, (ii) a foreign corporation, (iii) a foreign estate or trust
or (iv) a foreign partnership one or more of the members of which is, for
United States federal income tax purposes, a nonresident alien individual, a
foreign corporation or a nonresident alien fiduciary of a foreign estate or
trust.
TAX CONSEQUENCES TO UNITED STATES HOLDERS
PAYMENTS OF INTEREST
Interest paid on a Note will generally be taxable to a United States Holder
as ordinary interest income at the time it accrues or is received in accordance
with the United States Holder's method of accounting for federal income tax
purposes. Under the OID Regulations, all payments of interest on a Note that
matures one year or less from its date of issuance will be included in the
stated redemption price at maturity of the Notes and will be taxed in the
manner described below under "Original Issue Discount Notes". Special rules
governing the treatment of interest paid with respect to Original Issue
Discount Notes, including certain Floating Rate Notes, are described under
"Original Issue Discount Notes," below.
ORIGINAL ISSUE DISCOUNT NOTES
A Note that is issued for an amount less than its stated redemption price at
maturity will generally be considered to have been issued at an original issue
discount for federal income tax purposes (an
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"Original Issue Discount Note"). The "issue price" of a Note will equal the
first price to the public (not including bond houses, brokers or similar
persons or organizations acting in the capacity of underwriters, placement
agents or wholesalers) at which a substantial amount of the Notes is sold. The
stated redemption price at maturity of a Note will equal the sum of all
payments required under the Note other than payments of "qualified stated
interest". "Qualified stated interest" is stated interest unconditionally
payable as a series of payments in cash or property (other than debt
instruments of the issuer) at least annually during the entire term of the Note
and equal to the outstanding principal balance of the Note multiplied by a
single fixed rate or certain variable rates of interest or certain combinations
thereof. Certain Floating Rate Notes, as well as Notes providing for contingent
interest, are subject to special rules. Any such rules that are applicable to a
particular issuance of Notes will be described in the applicable Pricing
Supplement.
If the difference between a Note's stated redemption price at maturity and
its issue price is less than a de minimis amount, i.e., 1/4 of 1% of the stated
redemption price at maturity multiplied by the number of complete years to
maturity, then the Note will not be considered to have original issue discount.
United States Holders of Notes with a de minimis amount of original issue
discount will generally include such original issue discount in income, as
capital gain, on a pro rata basis as principal payments are made on the Note.
A United States Holder of Original Issue Discount Notes will be required to
include any qualified stated interest payments in income in accordance with the
Holder's method of accounting for federal income tax purposes. United States
Holders of Original Issue Discount Notes that mature more than one year from
their date of issuance will be required to include original issue discount in
income for federal income tax purposes as it accrues, in accordance with a
constant yield method based on a compounding of interest, before the receipt of
cash payments attributable to such income. Under this method, United States
Holders of Original Issue Discount Notes generally will be required to include
in income increasingly greater amounts of original issue discount in successive
accrual periods.
Under the OID Regulations, a Note that matures one year or less from its date
of issuance will be treated as a "short-term Original Issue Discount Note". In
general, a cash method United States Holder of a short-term Original Issue
Discount Note is not required to accrue original issue discount for United
States federal income tax purposes unless it elects to do so. Holders who make
such an election, Holders who report income for federal income tax purposes on
the accrual method and certain other Holders, including banks and dealers in
securities, are required to include original issue discount in income on such
short-term Original Issue Discount Notes as it accrues on a straight-line
basis, unless an election is made to accrue the original issue discount
according to a constant yield method based on daily compounding. In the case of
a United States Holder who is not required and who does not elect to include
original issue discount in income currently, any gain realized on the sale,
exchange or retirement of the short-term Original Issue Discount 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 yield method based
on daily compounding) through the date of sale, exchange or retirement. In
addition, such Holders will be required to defer deductions for any interest
paid on indebtedness incurred to purchase or carry short-term Original Issue
Discount Notes in an amount not exceeding the deferred interest income, until
such deferred interest income is recognized.
Under the OID Regulations, a United States Holder may make an election (the
"Constant Yield Election") to include in gross income all interest that accrues
on a Note (including original issue discount, as adjusted by any amortizable
bond premium) in accordance with a constant yield method based on the
compounding of interest.
SALE, EXCHANGE OR 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 on the sale, exchange or retirement
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and such Holder's adjusted tax basis in the Note. For these purposes, the
amount realized does not include any amount attributable to accrued interest on
the Note. Amounts attributable to accrued interest are treated as interest as
described under "Payments of Interest" above. A United States Holder's adjusted
tax basis in a Note will equal the cost of the Note to such Holder, increased
by the amount of any original issue discount or de minimis original issue
discount included in income by the Holder with respect to such Note and reduced
by any amortized premium and any principal payments received by the Holder and,
in the case of an Original Issue Discount Note, by the amounts of any other
payments that do not constitute qualified stated interest (as defined above).
Gain or loss realized on the sale, exchange or retirement of a Note will be
capital gain or loss (except, in the case of a short-term Original Issue
Discount Note, to the extent of any original issue discount not previously
included in the Holder's taxable income), and will be long-term capital gain or
loss if at the time of sale, exchange or retirement the Note has been held for
more than one year. See "Original Issue Discount Notes". The excess of net
long-term capital gains over net short-term capital losses is taxed at a lower
rate than ordinary income for certain non-corporate taxpayers. The distinction
between capital gain or loss and ordinary income or loss is also relevant for
purposes of, among other things, limitations on the deductibility of capital
losses.
AMORTIZABLE BOND PREMIUM
If a United States Holder purchases a Note for an amount that is greater than
the amount payable at maturity, such Holder will be considered to have
purchased such Note with "amortizable bond premium" equal in amount to such
excess, and may elect (in accordance with applicable Code provisions) to
amortize such premium, using a constant yield method, over the remaining term
of the Note (where such Note is not optionally redeemable prior to its maturity
date). A Holder who elects to amortize bond premium must reduce his tax basis
in the Note by the amount of the premium amortized in any year. An election to
amortize bond premium applies to all taxable debt obligations then owned and
thereafter acquired by the taxpayer and may be revoked only with the consent of
the Internal Revenue Service.
If a Holder makes a Constant Yield Election for a Note with amortizable bond
premium, such election will result in a deemed election to amortize bond
premium for all of the Holder's debt instruments with amortizable bond premium
and may be revoked only with the permission of the Internal Revenue Service
with respect to debt instruments acquired after revocation.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Certain noncorporate United States Holders may be subject to backup
withholding at a rate of 31% on payments of principal, premium and interest
(including original issue discount, if any) on, and the proceeds of disposition
of, a Note. Backup withholding will apply only if the Holder (i) fails to
furnish its Taxpayer Identification Number ("TIN") which, for an individual,
would be his Social Security number, (ii) furnishes an incorrect TIN, (iii) is
notified by the Internal Revenue Service that it has failed to properly report
payments of interest and dividends or (iv) under certain circumstances, fails
to certify, under penalty of perjury, that it has furnished a correct TIN and
has not been notified by the Internal Revenue Service that it is subject to
backup withholding for failure to report interest and dividend payments. United
States Holders should consult their tax advisors regarding their qualification
for exemption from backup withholding and the procedure for obtaining such an
exemption if applicable.
The amount of any backup withholding from a payment to a United States Holder
will be allowed as a credit against such Holder's United States federal income
tax liability and may entitle such Holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
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TAX CONSEQUENCES TO UNITED STATES ALIEN HOLDERS
Under present United States federal law, and subject to the discussion below
concerning backup withholding:
(a) payments of principal, interest (including original issue discount,
if any) and premium on the Notes by the Company or any paying agent to any
United States Alien Holder will not be subject to United States federal
withholding tax, provided that, in the case of interest, (i) such Holder
does not own, actually or constructively, 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote, is
not a controlled foreign corporation related, directly or indirectly, to
the Company through stock ownership, and is not a bank receiving interest
described in Section 881(c)(3)(A) of the Code and (ii) the statement
requirement set forth in Section 871(h) or Section 881(c) of the Code has
been fulfilled with respect to the beneficial owner, as discussed below;
and
(b) a United States Alien Holder of a Note will not be subject to United
States federal income tax on gain realized on the sale, exchange or other
disposition of such Note, unless (i) such Holder is an individual who is
present in the United States for 183 days or more in the taxable year of
disposition, and either (a) such individual has a "tax home" (as defined in
Code Section 911(d)(3)) in the United States (unless such gain is
attributable to a fixed place of business in a foreign country maintained
by such individual and has been subject to foreign tax of at least 10%) or
(b) the gain is attributable to an office or other fixed place of business
maintained by such individual in the United States or (ii) such gain is
effectively connected with the conduct by such Holder of a trade or
business in the United States.
Section 871(h) and 881(c) of the Code require that, in order to obtain the
portfolio interest exemption from withholding tax described in paragraph (a)
above, either the beneficial owner of the Note, or a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution") and that is holding the Note on behalf of such beneficial owner,
file a statement with the withholding agent to the effect that the beneficial
owner of the Note is not a United States Holder. Under temporary United States
Treasury Regulations, such requirement will be fulfilled if the beneficial
owner of a Note certifies on Internal Revenue Service Form W-8, under penalties
of perjury, that it is not a United States Holder and provides its name and
address, and any Financial Institution holding the Note on behalf of the
beneficial owner files a statement with the withholding agent to the effect
that it has received such a statement from the Holder (and furnishes the
withholding agent with a copy thereof).
If a United States Alien Holder of a Note is engaged in a trade or business
in the United States, and if interest (including original issue discount) on
the Note is effectively connected with the conduct of such trade or business,
the United States Alien Holder, although exempt from the withholding tax
discussed in the preceding paragraph, will generally be subject to regular
United States income tax on interest (including any original issue discount)
and on any gain realized on the sale, exchange or other disposition of a Note
in the same manner as if it were a United States Holder. See "Tax Consequences
to United States Holders" above. In lieu of the certificate described in the
preceding paragraph, such a Holder will be required to provide to the Company a
properly executed Internal Revenue Service Form 4224 in order to claim an
exemption from withholding tax. In addition, if such United States Alien Holder
is a foreign corporation, it may be subject to a branch profits tax equal to
30% (or such lower rate provided by an applicable treaty) of its effectively
connected earnings and profits for the taxable year, subject to certain
adjustments. For purposes of the branch profits tax, interest (including
original issue discount) on and any gain recognized on the sale, exchange or
other disposition of a Note will be included in the effectively connected
earnings and profits of such United States Alien Holder if such interest or
gain, as the case may be, is effectively connected with the conduct by the
United States Alien Holder of a trade or business in the United States.
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Under United States federal estate tax law, a Note held by an individual who
is a nonresident alien with respect to the United States at the time of his
death will not be subject to United States federal estate tax as a result of
such individual's death, provided that (i) the individual does not own,
actually or constructively, 10% or more of the total combined voting power of
all classes of stock of the Company entitled to vote and (ii) at the time of
such individual's death, payments with respect to such Note would not have been
effectively connected to the conduct by such individual of a trade or business
in the United States.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current United States federal income tax law, a 31% backup withholding
tax and information reporting requirements apply to certain payments of
principal, premium and interest (including original issue discount) made to,
and to the proceeds of sale before maturity by, certain noncorporate United
States persons. Under current Treasury Regulations, backup withholding will not
apply to payments made on a Note if the certifications required by Sections
871(h) and 881(c) are received, provided that the Company or such paying agent,
as the case may be, does not have actual knowledge that the payee is a United
States person.
Under current Treasury Regulations, payment on the sale, exchange or other
disposition of a Note made to or through a foreign office of a broker generally
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% or more of whose gross income is effectively connected
with a United States trade or business for a specified three-year period,
information reporting will be required unless the broker has in its records
documentary evidence that the beneficial owner is not a United States person
and certain other conditions are met or the beneficial owner otherwise
establishes an exemption. Under proposed Treasury Regulations, which are not
currently effective, backup withholding may apply to any payment which such
broker is required to report if such broker has actual knowledge that the payee
is a United States person. 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, that it is not a United
States person or otherwise establishes an exemption.
United States Alien Holders of Notes should consult their tax advisers
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and
the procedure for obtaining such an exemption, if available. Any amounts
withheld from a payment to a United States Alien Holder under the backup
withholding rules will be allowed as a credit against such Holder's United
States federal income tax liability and may entitle such Holder to a refund,
provided that the required information is furnished to the United States
Internal Revenue Service.
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FOREIGN CURRENCY RISKS
GENERAL
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated in other than U.S. dollars
entails significant risks that are not associated with a similar investment in
a security denominated in U.S. dollars. Such risks include, without limitation,
the possibility of significant changes in rates of exchange between the U.S.
dollar and the various foreign currencies or composite currencies and the
possibility of the imposition or modification of foreign exchange controls by
either the U.S. or foreign governments. Such risks generally depend on economic
and political events over which the Company has no control. In recent years,
rates of exchange between the U.S. dollar and certain foreign currencies have
been highly volatile and such volatility may be expected to continue in the
future. Fluctuations in any particular exchange rate that have occurred in the
past are not necessarily indicative, however, of fluctuations in the rate that
may occur during the term of any Note. Depreciation of the Specified Currency
other than U.S. dollars against the U.S. dollar would result in a decrease in
the effective yield of such Note below its coupon rate, and in certain
circumstances could result in a loss to the investor on a U.S. dollar basis.
Governments have imposed from time to time and may in the future impose
exchange controls which could affect exchange rates as well as the availability
of a Specified Currency at a Note's maturity. Even if there are no actual
exchange controls, it is possible that the Specified Currency for any
particular Note would not be available at such Notes' maturity. In that event,
the Company will repay in U.S. dollars on the basis of the most recently
available Exchange Rate. See "Description of Notes--Payment of Principal and
Interest".
THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS AND PRICING SUPPLEMENT
DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE NOTES DENOMINATED IN
OTHER THAN U.S. DOLLARS AND THE COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE
PROSPECTIVE PURCHASERS OF SUCH RISKS AS THEY EXIST AT THE DATE OF THIS
PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO TIME.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS
TO THE RISKS ENTAILED BY AN INVESTMENT IN THE NOTES DENOMINATED IN OTHER THAN
U.S. DOLLARS. NOTES DENOMINATED IN OTHER THAT U.S. DOLLARS ARE NOT AN
APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO
FOREIGN CURRENCY TRANSACTIONS.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies, and vice versa. In addition, banks do
not offer non-U.S. dollar denominated checking or savings account facilities in
the United States. Accordingly, payments on Notes made in a Specified Currency
other than U.S. dollars will be made from an account with a bank located in the
country issuing the Specified Currency (or, with respect to Notes denominated
In ECUs, an ECU account). See "Description of Notes--Payment of Principal and
Interest".
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in other than U.S. dollars or ECUs will not be sold in, or to
residents of, the country issuing the Specified Currency in which particular
Notes are denominated. The information set forth in this Prospectus Supplement
is directed to prospective purchasers who are United States residents, and the
Company disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase, holding or receipt of payments of principal of
and interest on the Notes. Such persons should consult their own financial and
legal advisors with regard to such matters.
GOVERNING LAW AND JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Courts in the United States generally would grant
judgment relating to an action based on the
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Notes only in U.S. dollars, and the date used to determine the rate of
conversion of foreign currencies or currency units into U.S. dollars will
depend on various factors, including which court rendered judgment. Section 27
of the Judiciary Law of the State of New York provides that a New York State
court would be required to enter judgment in the Specified Currency; such
judgment would then be converted into U.S. dollars at the rate of exchange
prevailing on the date judgment was rendered.
EXCHANGE RATE AND CONTROLS FOR SPECIFIED CURRENCIES
With respect to any Note denominated in other than U.S. dollars, a currency
supplement with respect to the applicable Specified Currency (which supplement
shall include information with respect to applicable current foreign exchange
controls, if any) shall be attached to this Prospectus Supplement. The
information therein concerning exchange rates is furnished as a matter of
information only and should not be regarded as indicative of the range of or
trends in fluctuations in currency exchange rates that may occur in the future.
If payment on a Note is required to be made in ECUs and on a payment date
with respect to such Note, ECU's are used neither as the unit of account of the
European Community (the "EC") or as the currency of the European Union, then
all payments due on such payment date shall be made in U.S. dollars. The amount
so payable on any payment date in ECUs shall be converted into U.S. dollars at
a rate determined by the Exchange Rate Agent as of the second Business Day
prior to the date on which such payment is due on the following basis: the
component currencies of the ECUs for this purpose (the "Components") shall be
the currency amounts that were components of the ECUs as of the last date on
which ECUs were used as the unit of account of the EC. The equivalent of ECUs
in U.S. dollars shall be calculated by aggregating the U.S. dollar equivalents
of the Components. The U.S. dollar equivalent of each of the Components shall
be determined by the Exchange Rate Agent on the basis of the most recently
available Exchange Rate for the Components, or as otherwise indicated in the
applicable Pricing Supplement.
As of the date hereof the ECU is a composite currency valued on the basis of
specified amounts of the currencies of 12 of the 15 member states of the EC.
Under the treaty establishing the EC, as amended by the treaty on European
Union (the "Treaty"), the currency composition of the ECU may not be changed.
The Treaty provides that at or before January 1, 1999, and subject to the
fulfilment of certain conditions, the ECU may become a currency in its own
right, replacing all or some of the currencies of the 15 member states of the
EC (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United
Kingdom). If, pursuant to the Treaty, all or some of the national currencies of
the 15 member states of the EC are replaced by the ECU as a currency in its own
right (whether or not such currency is named the "ECU") the payment of
principal of, or interest on, Notes denominated in such national currencies or
the ECU composite currency may be effected in ECU as a currency in its own
right in conformity with legally applicable measures taken pursuant to, or by
virtue of, the Treaty. Other changes as to the nature or composition of the ECU
may be made by the EC in conformity with the Treaty and EC law (changes in
composition would require amendment of the Treaty), in which event the
composition of the ECU will change accordingly and references to ECU in a Note
shall thereafter be construed as references to the ECU as so changed.
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SUPPLEMENTAL PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Distribution Agreement,
dated September , 1995 (the "Distribution Agreement"), the Notes are being
offered on a continuing basis by the Company through Goldman, Sachs & Co., CS
First Boston Corporation, Chase Securities, Inc., Citicorp Securities, Inc.,
First Chicago Capital Markets, Inc., Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and NationsBanc Capital Markets, Inc. (the
"Agents"), who have agreed to use reasonable efforts to solicit purchases of
the Notes. The Company may appoint additional agents to solicit sales of the
Notes; provided that any such solicitation and sale of the Notes shall be on
the same terms and conditions as the Agents have agreed to. The Company will
have the sole right to accept offers to purchase Notes and may reject any
proposed purchase of Notes as a whole or in part. The Agents shall have the
right, in their discretion reasonably exercised, to reject any offer to
purchase Notes, as a whole or in part. The Company will pay the Agents a
commission of from 0.125% to 0.750% of the principal amount of Notes, depending
upon maturity, for sales made through them as Agents. In addition, the Company
may arrange for the Notes to be sold through other agents, dealers or
underwriters and reserves the right to sell Notes directly on its own behalf.
No commission will be payable on any Notes sold directly by the Company.
The Company may also sell Notes to the Agents as principals for their own
accounts at a discount to be agreed upon at the time of sale, or the purchasing
Agents may receive from the Company a commission or discount equivalent to that
set forth on the cover page hereof in the case of any such principal
transaction in which no other discount is agreed. Such Notes may be resold at
prevailing market prices, or at prices related thereto, at the time of such
resale, as determined by the Agents or, if so agreed with the Company, at a
fixed public offering price.
In addition, the Agents may offer the Notes they have purchased as principal
to other dealers. The Agents may sell Notes to any dealer at a discount and,
unless otherwise specified in the applicable Pricing Supplement, such discount
allowed to any dealer may include all or part of the discount to be received
from the Company. Unless otherwise indicated in the 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 equal to the commission applicable to any agency sale of a Note of
identical maturity. After the initial public offering of Notes to be resold to
investors and other purchasers, the public offering price (in the case of Notes
to be resold at a fixed public offering price), concession and discount may be
changed.
The Agents, as agents or principals, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933 (the "Act"). The Company has
agreed to indemnify the Agents against certain liabilities, including
liabilities under the Act. The Company has agreed to reimburse the Agents for
certain expenses.
The Agents may sell to or through dealers who may resell to investors, and
the Agents may pay all or part of their discount or commission to such dealers.
Such dealers may be deemed to be "underwriters" within the meaning of the Act.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes will be required to be made in immediately
available funds in The City of New York.
The Agents may be customers of, engage in transactions with and perform
services for the Company in the ordinary course of business.
The Notes are a new issue of securities with no established trading market
and will not be listed on any securities exchange. No assurance can be given as
to the existence or liquidity of the secondary market for the Notes.
S-24
<PAGE>
VALIDITY OF NOTES
Certain legal matters relating to the validity of the Notes will be passed
upon for the Company by Keith H. Williamson, Vice President and General Counsel
of the Company, and Davis Polk & Wardwell, and for the Agents by Sullivan &
Cromwell, New York, New York. The opinions of Mr. Williamson, Davis Polk &
Wardwell and Sullivan & Cromwell will be based upon, and subject to, certain
assumptions as to future actions required to be taken in connection with the
issuance and sale of Notes and as to other events which may affect the validity
of Notes but which cannot be ascertained on the date of such opinions.
S-25
<PAGE>
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THE PRICING SUPPLE-
MENT, THIS PROSPECTUS SUPPLEMENT, OR THE PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED. THE PRICING SUPPLEMENT, THIS PROSPECTUS SUPPLEMENT AND THE PROSPEC-
TUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES OTHER THAN THE NOTES DESCRIBED IN THE PRICING SUPPLEMENT AND
THIS PROSPECTUS SUPPLEMENT. THE PRICING SUPPLEMENT, THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY SUCH NOTES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITA-
TION IS UNLAWFUL. NEITHER THE DELIVERY OF THE PRICING SUPPLEMENT, THIS PRO-
SPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFOR-
MATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Description of Notes....................................................... S-2
United States Taxation..................................................... S-17
Foreign Currency Risks..................................................... S-22
Supplemental Plan of Distribution.......................................... S-24
Validity of Notes.......................................................... S-25
PROSPECTUS
Additional Information..................................................... 2
Incorporation of Certain Documents by
Reference................................................................. 2
The Company................................................................ 3
Use of Proceeds and Funding Policy......................................... 4
Ratio of Earnings to Fixed Charges......................................... 5
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 11
Validity of Debt Securities................................................ 12
Experts.................................................................... 12
</TABLE>
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$500,000,000
PITNEY BOWES CREDIT CORPORATION
MEDIUM-TERM NOTES, SERIES C
----------------
PROSPECTUS SUPPLEMENT
----------------
GOLDMAN, SACHS & CO.
CS FIRST BOSTON
CHASE SECURITIES, INC.
CITICORP SECURITIES, INC.
FIRST CHICAGO CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
NATIONSBANC CAPITAL MARKETS, INC.
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