<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 4, 1999)
$300,000,000
[WACHOVIA LOGO]
Wachovia Corporation
Subordinated Floating Rate Notes due May 2, 2005
----------------
The Subordinated Floating Rate Notes of Wachovia Corporation will mature on
May 2, 2005. Interest on the Notes is payable quarterly in arrears on February
1, May 1, August 1 and November 1, beginning May 1, 2000. The Notes will be
redeemable in whole or in part at the option of Wachovia on any interest
payment date beginning August 1, 2000, at 100% of the principal amount plus
accrued interest, as set forth under "Description of the Notes--Redemption" on
page S-11 of this prospectus supplement. The Notes will not be subject to any
sinking fund.
----------------
<TABLE>
<CAPTION>
Per Note Total
-------- ------------
<S> <C> <C>
Public offering price(1)........................... 100.000% $300,000,000
Underwriting discount.............................. .133% $400,000
Proceeds, before expenses, to Wachovia
Corporation(1).................................... 99.867% $299,600,000
</TABLE>
(1)Plus accrued interest from March 29, 2000, if settlement occurs
after that date.
----------------
The Notes are unsecured obligations of Wachovia Corporation. They are not
savings accounts, deposits or other obligations of any bank or non-bank
subsidiary of Wachovia Corporation and are not insured by the Federal Deposit
Insurance Corporation, the Bank Insurance Fund or any other government agency.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the related prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The underwriters are offering the Notes subject to various conditions. The
underwriters expect to deliver the Notes, in book-entry form only, to
purchasers through The Depository Trust Company on or about March 29, 2000.
----------------
Lehman Brothers Wachovia Securities, Inc.
----------------
The date of this prospectus supplement is March 22, 2000.
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus supplement and the prospectus. This prospectus
supplement and the prospectus may be used only for the purpose for which they
have been prepared. No one is authorized to give information other than that
contained in this prospectus supplement and the prospectus and in the documents
referred to in this prospectus supplement and the prospectus and which are made
available to the public. We have not, and the underwriters have not, authorized
any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it.
We are not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should assume that the information appearing in this prospectus supplement and
the prospectus, as well as information we previously filed with the Securities
and Exchange Commission and incorporated by reference, is accurate as of the
date on the front cover of this prospectus supplement only. Our business,
financial condition, results of operations and prospects may have changed since
that date. This prospectus supplement and the accompanying prospectus do not
constitute an offer, or an invitation on our behalf or on behalf of the
underwriters or any of them, to subscribe for and purchase, any of the Notes,
and may not be used for or in connection with an offer or solicitation by
anyone, in any jurisdiction in which such an offer or solicitation is not
authorized or to any person to whom it is unlawful to make such an offer or
solicitation.
--------------
TABLE OF CONTENTS
Prospectus Supplement
Page
----
Wachovia Corporation....................................................... S-3
Incorporation by Reference.................................................. S-7
Consolidated Ratio of Earnings to Fixed Charges............................. S-9
Use of Proceeds............................................................. S-9
Description of the Notes.................................................... S-9
Underwriting................................................................S-12
Legal Matters...............................................................S-13
Prospectus
Page
----
About this Prospectus....................................................... 2
Where You Can Find More Information......................................... 3
Wachovia Corporation........................................................ 4
Consolidated Ratio of Earnings to Fixed Charges............................. 5
Use of Proceeds............................................................. 5
Description of Debt Securities.............................................. 5
Plan of Distribution........................................................ 15
Experts..................................................................... 16
Legal Matters............................................................... 16
--------------
S-2
<PAGE>
WACHOVIA CORPORATION
Background
Wachovia Corporation is a financial holding company serving regional,
national and international markets and maintains dual headquarters in
Winston-Salem, North Carolina and Atlanta, Georgia. At December 31, 1999,
Wachovia and its consolidated subsidiaries had total assets of $67.353 billion,
deposits of $41.786 billion, and a market capitalization of $13.723 billion. At
December 31, 1999, Wachovia ranked 16th based on both its consolidated asset
size and on its market capitalization among domestic U.S. banking companies
Wachovia's common stock is traded on the New York Stock Exchange under the
symbol WB. Wachovia's executive offices are located at 100 North Main Street,
Winston-Salem, North Carolina 27101 and 191 Peachtree Street, N.E., Atlanta,
Georgia 30303, and its telephone numbers are (336) 770-5000 and (404) 332-5000.
Wachovia's principal banking subsidiaries are Wachovia Bank, National
Association ("Wachovia Bank"), and The First National Bank of Atlanta. Wachovia
Bank is a national banking association headquartered in Winston-Salem, North
Carolina and operates banking offices in North Carolina, South Carolina,
Georgia, Virginia, and Florida. The First National Bank of Atlanta is a national
banking association headquartered in Atlanta, Georgia and provides credit card
services nationwide under the name "Wachovia Bank Card Services."
Through its various subsidiaries, Wachovia offers credit and deposit
services, insurance, investment and trust products, capital markets, wealth
management, securities brokerage, and information services to consumers,
primarily in the Southeast, and to both domestic and foreign corporations.
Wachovia provides consumer products and services through, as of December 31,
1999, a network of 712 retail branches and 1,355 ATMs, as well as through
Wachovia On-Call telephone banking, automated Phone Access and internet-based
investing and banking at www.wachovia.com. Wachovia provides global solutions to
corporate clients through locations in Chicago, London, New York and Sao Paulo,
through representative offices in Hong Kong and Tokyo, and through worldwide
strategic alliances.
Supervision and Regulation
General
Wachovia and its bank subsidiaries are subject to an extensive system of
banking laws and regulations that are intended primarily for the protection of
customers and depositors. These laws and regulations govern such areas as
permissible activities, reserves, loans and investments, and rates of interest
that can be charged on loans. Similarly, Wachovia's subsidiaries engaged in
investment advisory and other securities related activities are subject to
various U.S. federal and state laws and regulations that are intended to benefit
clients of investment advisors and shareholders in mutual funds. In addition,
Wachovia and its subsidiaries are subject to general U.S. federal laws and
regulations and to the laws and regulations of the states or countries in which
they conduct their businesses. Described below are the material elements of
selected laws and regulations applicable to Wachovia and its subsidiaries. The
descriptions are not intended to be complete and are qualified in their entirety
by reference to the full text of the statutes and regulations described.
Financial Modernization Legislation: The Gramm-Leach Bliley Act
On November 12, 1999, the President signed the Gramm-Leach-Bliley Act
("GLB") into law. Effective as of March 11, 2000, GLB:
o allows bank holding companies meeting management, capital and
Community Reinvestment Act ("CRA") standards to engage in a
substantially broader range of nonbanking activities than was
S-3
<PAGE>
previously permissible, including insurance underwriting and making
merchant banking investments in commercial and financial companies;
o allows insurers and other financial services companies to acquire
banks;
o removes various restrictions that previously applied to bank holding
company ownership of securities firms and mutual fund advisory
companies; and
o establishes the overall regulatory structure applicable to bank
holding companies that also engage in insurance and securities
operations.
For a bank holding company to engage in the broader range of activities that are
permitted by GLB,
o all of its depository institutions must be well capitalized and well
managed and
o it must file a declaration with the Board of Governors of the Federal
Reserve System (Federal Reserve Board or FRB) that it elects to be a
"financial holding company."
In addition, to commence any new activity permitted by GLB and to acquire any
company engaged in any new activities permitted by GLB, each insured depository
institution of the financial holding company must have received at least a
"satisfactory" rating in its most recent examination under the CRA. Effective
March 13, 2000, Wachovia became a financial holding company.
GLB also modified laws related to financial privacy and community
reinvestment. The new financial privacy provisions generally prohibit financial
institutions, including Wachovia, from disclosing nonpublic personal financial
information to third parties unless customers have the opportunity to "opt out"
of the disclosure.
Regulated Entities
Financial Holding Company. As a financial holding company, Wachovia is
regulated under the Bank Holding Company Act of 1956, as amended by GLB, and is
subject to the supervision of the Federal Reserve Board. Wachovia also is a
savings and loan holding company registered under the Home Owners' Loan Act of
1933, as amended by the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, and is subject to the supervision of the Office of Thrift
Supervision (OTS).
In general, the BHC Act limits the business of bank holding companies that
are financial holding companies to banking, managing or controlling banks,
performing certain servicing activities for subsidiaries, and as a result of GLB
amendments, engaging in any activity, or acquiring and retaining the shares of
any company engaged in any activity, that is either
o financial in nature or incidental to such financial activity (as
determined by the Federal Reserve Board in consultation with the
Office of the Comptroller of the Currency) or
o complementary to a financial activity and does not pose a substantial
risk to the safety and soundness of depository institutions or the
financial system generally (as solely determined by the Federal
Reserve Board).
Activities that are financial in nature include activities that the Federal
Reserve Board had determined, by order or regulation in effect prior to the
enactment of GLB, to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto.
Bank Subsidiaries. As federally insured national banks, Wachovia Bank,
National Association ("Wachovia Bank") and The First National Bank of Atlanta
("FNBA") are subject to supervision and examination by the OCC and the Federal
Deposit Insurance Corporation ("FDIC"). Atlantic Savings Bank F.S.B.
("Atlantic") is a federally insured savings bank and is subject to supervision
and examination by the FDIC and the OTS.
S-4
<PAGE>
OFFITBANK is a trust company chartered under New York Banking Law and is subject
to supervision and examination by the New York State Banking Department.
Nonbank Subsidiaries. Wachovia's nonbank subsidiaries engaged in
securities-related activities are regulated by the Securities and Exchange
Commission. Wachovia Securities, Inc. and CapTrust Financial
Advisors, LLC. conduct brokerage operations and engage in securities activities.
Both subsidiaries act as broker-dealers for the sale of shares of mutual funds,
including the Wachovia Funds family of mutual funds. Mecklenburg Securities,
Inc. acts as a limited broker-dealer in variable life insurance and variable
annuity products. Wachovia Securities, Inc., CapTrust Financial Advisors, LLC
and Mecklenburg Securities, Inc. are registered broker-dealers and members of
the National Association of Securities Dealers, Inc., a securities industry
self-regulatory organization. During 1999, Wachovia Investments, Inc. also acted
as a broker-dealer by engaging in brokerage operations and in securities
activities. On February 11, 2000, Wachovia Investments, Inc. was merged into
Wachovia Securities, Inc.
Investment Advisors and Investment Companies. Certain of Wachovia's
subsidiaries are registered investment advisors under the Investment Advisors
Act of 1940 and, as such, are supervised by the SEC. They also are subject to
various U.S. federal and state laws and regulations and to the laws of any other
countries in which they conduct business. These laws and regulations generally
grant supervisory agencies broad administrative powers, including the power to
limit or restrict the conduct of business due to failure to comply with such
laws and regulations. The possible sanctions that may be imposed for violations
of these laws and regulations include the suspension of individual employees,
limitations on engaging in business for specific periods, the revocation of the
registration as an investment advisor, censures and fines. Each investment
company (as defined in the Investment Company Act of 1940) which is advised by a
subsidiary of Wachovia, including the Wachovia Funds and OFFITBANK families of
mutual funds, is registered with the SEC.
MSRB and CFTC. Certain of Wachovia's public finance activities are
regulated by the Municipal Securities Rulemaking Board. Wachovia Securities,
Inc. and certain of Wachovia's other subsidiaries are registered with the
Commodity Futures Trading Commission ("CFTC") and are subject to CFTC
regulation.
Payment of Dividends and Other Restrictions
Wachovia is a legal entity separate and distinct from its subsidiaries.
There are various legal and regulatory limitations on the extent to which
Wachovia's subsidiaries, including its bank and savings and loan subsidiaries,
can finance or otherwise supply funds to Wachovia.
The principal source of Wachovia's cash revenues is dividends from its
subsidiaries, and there are certain legal restrictions under federal and state
law on the payment of dividends by such subsidiaries. The amount of dividends
that may be paid by Wachovia Bank and FNBA without regulatory approval is
limited to the lesser of
o its net profits for the current year combined with its retained net
profits for the preceding two calendar years or
o its cumulative undivided profits.
The relevant regulatory agencies also have authority to prohibit a bank holding
company, which would include Wachovia, or a national banking association from
engaging in what, in the opinion of such regulatory body, constitutes an unsafe
or unsound practice in conducting its business. The payment of dividends could,
depending upon the financial condition of the subsidiary, be deemed to
constitute an unsafe or unsound practice. Under applicable law, as a savings
bank, Atlantic must give the OTS 30 days prior notice of any proposed payment of
dividends.
Wachovia Bank and FNBA and their respective subsidiaries are subject to
limitations under Section 23A of the Federal Reserve Act with respect to
extensions of credit to, investments in, and certain other transactions
S-5
<PAGE>
with, Wachovia and its other subsidiaries. Furthermore, loans and extensions of
credit also are subject to various collateral requirements.
Capital Adequacy
The federal bank regulatory agencies have adopted minimum risk-based and
leverage capital guidelines for U.S. banking organizations. The minimum required
risk-based capital ratio of qualifying total capital to risk-weighted assets
(including certain off-balance sheet items, such as standby letters of credit)
is 8%, of which 4% must consist of Tier I capital. The minimum required leverage
capital ratio (Tier I capital to average total assets) is 3% for banking
organizations that meet certain specified criteria, including that they have the
highest regulatory rating.
Failure to meet capital guidelines can subject a banking organization to a
variety of enforcement remedies, including additional substantial restrictions
on its operations and activities, termination of deposit insurance by the FDIC,
and under certain conditions the appointment of a receiver or conservator.
Federal banking statutes establish five capital categories for depository
institutions ("well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized") and impose
significant restrictions on the operations of an institution that is not at
least adequately capitalized. Under certain circumstances, an institution may be
downgraded to a category lower than that warranted by its capital levels and
subjected to the supervisory restrictions applicable to institutions in the
lower capital category. A depository institution is generally prohibited from
making capital distributions (including paying dividends) or paying management
fees to a holding company if the institution would thereafter be under
capitalized. Adequately capitalized institutions may accept brokered deposits
only with a waiver from the FDIC, while undercapitalized institutions may not
accept, renew or rollover brokered deposits.
An undercapitalized depository institution also is subject to restrictions
in a number of areas, including asset growth, acquisitions, branching, new lines
of business and borrowing from the Federal Reserve System. In addition, an
undercapitalized depository institution is required to submit a capital
restoration plan. A depository institution's holding company must guarantee the
capital plan up to an amount equal to the lesser of 5% of the depository
institution's assets at the time it becomes undercapitalized or the amount
needed to restore the capital of the institution to the levels required for the
institution to be classified as adequately capitalized at the time the
institution fails to comply with the plan and any such guarantee would be
entitled to a priority of payment in bankruptcy. A depository institution is
treated as if it is significantly undercapitalized if it fails to submit a
capital plan that (i) is based on realistic assumptions and (ii) is likely to
succeed in restoring the depository institution's capital.
Significantly undercapitalized depository institutions may be subject to a
number of additional significant requirements and restrictions, including
requirements to sell sufficient voting stock to become adequately capitalized,
to replace or improve management, to reduce total assets, to cease acceptance of
correspondent bank deposits, to restrict senior executive compensation and to
limit transactions with affiliates. Critically undercapitalized depository
institutions are further subject to restrictions on paying principal or interest
on subordinated debt, making investments, expanding, acquiring or selling
assets, extending credit for highly leveraged transactions, paying excessive
compensation, amending their charters or bylaws and making any material changes
in accounting methods. In general, a receiver or conservator must be appointed
for a depository institution within 90 days after the institution is deemed to
be critically undercapitalized.
Support of Subsidiary Banks
Under Federal Reserve Board policy, Wachovia is expected to act as a source
of financial strength to, and to commit resources to support its banking
subsidiaries. This support may be required at times when, absent such
S-6
<PAGE>
FRB policy, Wachovia may not be inclined to provide it. In the event of a bank
holding company's bankruptcy, any commitment by the bank holding company to a
federal bank regulatory agency to maintain the capital of a subsidiary bank will
be assumed by the bankruptcy trustee and entitled to a priority in payment.
A depository institution insured by the FDIC can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC in
connection with the default of a commonly controlled FDIC insured depository
institution or any assistance provided by the FDIC to any commonly controlled
FDIC insured depository institution "in danger of default." Default is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a default is likely to occur in the absence of regulatory assistance.
Liability for the losses of commonly controlled depository institutions can lead
to the failure of some or all depository institutions in a holding company
structure, if the remaining institutions are unable to pay the liability
assessed by the FDIC. Any obligation or liability owed by a subsidiary bank to
its parent company is subordinate to the subsidiary bank's cross-guarantee
liability for losses of commonly controlled depository institutions.
FDIC Insurance Assessments
All of the deposits of Wachovia's bank and thrift subsidiaries are subject
to FDIC deposit insurance assessments. The FDIC has authority to raise or lower
assessment rates on insured deposits in order to achieve certain designated
reserve ratios in the Bank Insurance Fund ("BIF") and the Savings Association
Insurance Fund ("SAIF") and to impose special additional assessments. The FDIC
applies a risk-based assessment system that places each financial institution
into one of nine risk categories, based on capital levels and supervisory
criteria and an evaluation of the bank's risk to the BIF or SAIF, as applicable.
The current FDIC premium schedule for the SAIF and the BIF ranges from 0% to
0.27%.
Community Reinvestment Act
The Community Reinvestment Act requires banks to help serve the credit
needs in their communities, including credit to low and moderate income
individuals and geographies. Should Wachovia or its bank subsidiaries fail to
adequately serve the community, there are penalties which might be imposed,
including denials to expand branches, relocate, add subsidiaries and affiliates,
expand into new financial activities and merge with or purchase other financial
institutions.
Legislative Initiatives
Various legislative initiatives are from time to time introduced in
Congress. Wachovia cannot determine the ultimate effect that any such potential
legislation, if enacted, would have upon its financial condition or operations.
INCORPORATION BY REFERENCE
We have filed with the SEC, Washington, D.C., a registration statement on
Form S-3 under the Securities Act of 1933, as amended, with respect to the
securities that we are offering by this prospectus supplement and the
accompanying prospectus. This prospectus supplement and the accompanying
prospectus do not contain all of the information set forth in the registration
statement and the exhibits and schedules thereto. Certain items are omitted in
accordance with the rules and regulations of the SEC. For further information
with respect to Wachovia and the securities offered hereby, reference is made to
the registration statement and the exhibits and any schedules filed with the
registration statement. Statements contained in this prospectus and the
accompanying prospectus as to the contents of any contract or other document
referred to are not necessarily complete and in each instance, if such contract
or document is filed as an exhibit, reference is made to the copy
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<PAGE>
of such contract or other document filed as an exhibit to the registration
statement, each statement being qualified in all respects by such reference.
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file, including
the registration statement, at the SEC's Public Reference room at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, U.S.A., and at the SEC's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048, U.S.A., and at Citicorp Center, Suite 1400, 500 West Madison Street,
Chicago, IL 60661, U.S.A. For further information on the operation of the Public
Reference room, you may call the SEC at 1-800-SEC-0330. Our SEC filings are also
available to the public over the Internet at the SEC's website at
http://www.sec.gov. You may also inspect our SEC filings at the New York Stock
Exchange, the exchange on which our common stock is listed, at 20 Broad Street,
7th Floor, New York, New York 10005, U.S.A.
The SEC allows us to "incorporate by reference" the information in
documents that we file with them. This means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is an important part of this prospectus supplement and
the accompanying prospectus, and information in documents that we file after the
dates of this prospectus supplement and the prospectus and before the
termination of the offering contemplated by this prospectus supplement and the
prospectus will automatically update and supersede information in this
prospectus supplement and the prospectus.
We incorporate by reference our Annual Report on Form 10-K for the year
ended December 31, 1998, Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1999 and Current Reports on Form 8-K dated
January 14, 1999 and May 13, 1999, and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, until we sell all of the securities offered by this prospectus
supplement and the accompanying prospectus.
We will provide without charge, upon written or oral request, to each
person to whom this prospectus supplement and the accompanying prospectus are
delivered, a copy of any or all of the documents described above which have been
or may be incorporated by reference in this prospectus supplement and the
accompanying prospectus but not delivered with this prospectus supplement and
the accompanying prospectus. Such requests should be directed to Wachovia
Corporation, 100 North Main Street, Winston-Salem, North Carolina 27101,
Attention: Secretary. Telephone requests may be directed to (336) 770-5000.
This prospectus supplement and the accompanying prospectus contain or
incorporate by reference forward-looking statements that have been made pursuant
to the provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are not historical facts, but rather are based on our
current expectations, estimates and projections about Wachovia's industry, our
beliefs and assumptions. Words such as "anticipates", "expects", "intends",
"plans", "believes", "seeks", "estimates" and similar expressions are intended
to identify forward-looking statements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties and other
factors, some of which are beyond our control, are difficult to predict and
could cause actual results to differ materially from those expressed or
forecasted in the forward-looking statements. Risks and uncertainties that may
affect future results include, but are not limited to, changes in the economy,
interest rate movements, timely development by Wachovia of technology
enhancements for its products and operating systems, the impact of competitive
products, services and pricing, Congressional legislation and similar matters.
We caution you not to place undue reliance on forward-looking statements, which
are subject to influence by the named risk factors and unanticipated future
events and which reflect our management's view only as of the date of this
prospectus supplement or the accompanying prospectus. We are not obligated to
update these statements or publicly release the results of any revisions to them
to reflect events or circumstances after the date of this prospectus supplement
or the accompanying prospectus, or to reflect the occurrence of unanticipated
events.
S-8
<PAGE>
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following unaudited table presents the consolidated ratio of earnings
to fixed charges of Wachovia for the periods indicated. The consolidated ratio
of earnings to fixed charges has been computed by dividing net income plus all
applicable income taxes plus fixed charges by fixed charges. Fixed charges
represent all interest expense (ratios are presented both including and
excluding interest on deposits), and the portion of net rental expense which is
deemed to be equivalent to interest on long-term debt. Interest expense (other
than on deposits) includes interest on long-term debt, federal funds purchased
and securities sold under agreements to repurchase, mortgages, commercial paper
and other funds borrowed.
Year Ended December 31,
-------------------------------------
1999 1998 1997 1996 1995
Including interest on deposits ..... 1.69x 1.56x 1.40x 1.52x 1.50x
Excluding interest on deposits ..... 2.61x 2.33x 1.98x 2.22x 2.15x
USE OF PROCEEDS
We will use the estimated net proceeds from the sale of the Notes (as set
forth opposite "Proceeds, before expenses, to Wachovia Corporation" on the cover
page of this prospectus supplement) for general corporate purposes, principally
to fund investments in, or extensions of credit to, our banking and nonbanking
subsidiaries. We also may use such net proceeds to allow our subsidiaries to
repay borrowings incurred by such subsidiaries. Specific allocations of the
proceeds to such purposes have not been made at the date of this prospectus
supplement, although our management has determined that funds should be borrowed
at this time in anticipation of future funding or capital requirements of our
subsidiaries. The precise amount and timing of investments in and extensions of
credit to the subsidiaries will depend upon their funding requirements and the
availability of other funds to us and our subsidiaries. In addition to the
foregoing, we also may use a portion of the net proceeds to fund possible
acquisitions if suitable opportunities develop in the future. Based upon
anticipated future financing requirements, we expect that we will, from time to
time, engage in additional financings of a character and in amounts to be
determined.
DESCRIPTION OF THE NOTES
You should read the information in this section in conjunction with the
statements under "Description of Debt Securities" beginning on page 5 of the
accompanying prospectus. If this summary of the terms of the Notes differs in
any way from the "Description of Debt Securities" in the prospectus, you should
rely on this summary.
General
The Notes mature on May 2, 2005. The initial aggregate principal amount of
the Notes is $300,000,000. The Notes will bear interest at a variable annual
rate equal to LIBOR (as defined under "Interest Rate Determination" below) plus
.55% on the principal amount thereof.
S-9
<PAGE>
The Notes:
o will be issued in U.S. dollars in denominations of $1,000 and integral
multiples of $1,000;
o will be issued pursuant to an indenture dated July 15, 1998 (referred
to as the "Subordinated Indenture" in the accompanying prospectus)
between Wachovia and The Chase Manhattan Bank, as trustee (referred to
as the "Subordinated Trustee" in the accompanying prospectus), and
will represent a new and separate series of Subordinated Securities
(as that term is used in the accompanying prospectus) under that
indenture;
o are redeemable before maturity, as set forth on page S-11 of this
prospectus supplement under "-- Redemption";
o are not subject to any sinking fund;
o will be represented by one or more global certificates in fully
registered form, and except in certain limited circumstances, will not
be issued in individual certificated form (if the Notes are issued in
individual certificated form, they will be issued in registered form,
and payments of principal and interest will be made according to
alternative arrangements);
o represent unsecured and subordinated debt;
o will be repaid at par at maturity; and
o will rank pari passu with Wachovia's other unsecured and subordinated
debt.
Interest:
o is payable quarterly in arrears on February 1, May 1, August 1 and
November 1 of each year, beginning May 1, 2000, to the person in whose
name each Note is registered at the close of business on the business
day immediately before that interest payment date or, if the Notes are
no longer in book-entry form, the fifteenth day (whether or not a
business day) of the month immediately before the month in which the
relevant interest payment date occurs;
o will be calculated for any period on the basis of the actual number of
days elapsed in that period and a year of 360-days; and
o payments begin on May 1, 2000 and interest will begin to accrue from
March 29, 2000.
We will deliver to the trustee, annually, an officers' certificate as to
the existence or absence of defaults under the indenture. We may, without the
consent of the holders of the Notes, issue additional securities having the same
ranking and the same interest rate, maturity and other terms as the Notes.
Interest Rate Determination
The interest period with respect to the Notes is each successive period
from and including an interest payment date (or the date of original issuance,
in the case of the initial interest period) to but excluding the next interest
payment date (or the final maturity of the Notes, in the case of the interest
period commencing February 1, 2005). If an interest payment date would not be a
business day, then that interest payment date and the first day of the next
interest period will be the next business day, except if that business day is in
the next calendar month, that interest payment date and the first day of the
next interest period will be the immediately preceding business day. The term
"business day" means any day other than a Saturday or a Sunday, or a day on
which banking institutions in New York, New York or Winston-Salem, North
Carolina are authorized or required by law to close.
The Chase Manhattan Bank, as calculation agent, will calculate the interest
rate for each quarterly interest period based on LIBOR determined as of two
London business days (defined as any day, other than a Saturday or
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Sunday, on which banks are open for business in London) prior to the first day
of that interest period. Each such day is referred to as a determination date.
"LIBOR" means, with respect to a quarterly interest period relating to an
interest payment date (in the following order of priority):
o the rate (expressed as a percentage per year) for Eurodollar deposits
having a three-month maturity that appears on Telerate Page 3750 as of
11:00 a.m. (London time) on the related determination date;
o if that rate does not appear on Telerate Page 3750 as of 11:00 a.m.
(London time) on the related determination date, LIBOR will be the
arithmetic mean (if necessary, rounded upwards to the nearest whole
multiple of 0.00001%) of the rates (expressed as percentages per year)
for Eurodollar deposits having a three-month maturity that appear on
Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of
11:00 a.m. (London time) on that determination date;
o if that rate does not appear on Reuters Page LIBO as of 11:00 a.m.
(London time) on the related determination date, the calculation agent
will request the principal London offices of four leading banks in the
London interbank market to provide those banks' offered quotations
(expressed as percentages per year) to prime banks in the London
interbank market for Eurodollar deposits having a three-month maturity
as of 11:00 a.m. (London time) on that determination date. If at least
two of those quotations are provided, LIBOR will be the arithmetic
mean (if necessary, rounded upwards to the nearest whole multiple of
0.00001%) of those quotations;
o if fewer than two of those quotations are provided as requested in the
bullet point immediately above, the calculation agent will request
four major New York City banks to provide those banks' offered
quotations (expressed as percentages per year) to leading European
banks for loans in Eurodollars having a three-month maturity as of
11:00 a.m. (London time) on that determination date. If at least two
of those quotations are provided, LIBOR will be the arithmetic mean
(if necessary, rounded upwards to the nearest whole multiple of
0.00001%) of those quotations; and
o if fewer than two of those quotations are provided as requested in the
bullet point immediately above, LIBOR will be LIBOR as determined on
the previous determination date.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related determination date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a
corrected rate before 12:00 noon (London time) on that determination date, the
corrected rate as so substituted on the applicable page will be the applicable
LIBOR for that determination date.
Absent manifest error, the calculation agent's determination of LIBOR and
its calculation of the applicable interest rate for each interest period will be
final and binding. You may obtain the interest rates for the current and
preceding interest periods by writing or calling the Corporate Trust Department
of the calculation agent at The Chase Manhattan Bank, 450 West 33rd Street, 15th
Floor, New York, New York 10001 (telephone 1-800-275-2048).
In no event shall the interest rate on the Notes at any time exceed the
maximum rate permitted under applicable law.
Redemption
The Notes will be redeemable in whole or in part at our option on any
interest payment date beginning August 1, 2000 at a redemption price equal to
100% of the principal amount of the Notes, plus accrued interest thereon to the
date of redemption. We will mail notice of any redemption at least 15 days but
no more than 30 days before the redemption date to each holder of
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Notes to be redeemed. Unless we default in payment of the redemption price, on
and after the redemption date, interest will cease to accrue on the Notes, or
portions thereof, called for redemption.
Subordination
The Notes will be our direct, unsecured obligations and will be subordinate
to all of our Senior Indebtedness, as described on page 9 of the accompanying
prospectus under "Description of Debt Securities -- Subordination of
Subordinated Securities". In certain circumstances relating to our dissolution,
winding-up, liquidation or reorganization, the Notes will also be subordinate to
all Additional Senior Obligations, as described on pages 10-11 of the
accompanying prospectus under "Description of Debt Securities -- Subordination
of Subordinated Securities". The Subordinated Indenture does not limit or
prohibit us from incurring Senior Indebtedness or Additional Senior Obligations.
As of December 31, 1999, we had outstanding approximately $1.347 billion (which
includes discount) of Senior Indebtedness and no Additional Senior Obligations.
For a description of the terms of a limitation on the right of acceleration
of the Notes, see pages 11-13 of the accompanying prospectus under "Description
of Debt Securities--Events of Default; Limited Rights of Acceleration for
Subordinated Securities".
Book-Entry System
The Notes initially will be represented by one or more book-entry
securities deposited with The Depository Trust Company ("DTC") and registered in
the name of a nominee of DTC. The term "depositary" refers to DTC or any
successor depositary. The Notes will be available for purchase in denominations
of $1,000 and integral multiples thereof in book-entry form only. Except in the
limited circumstances as described on pages 7-8 of the accompanying prospectus
under "Description of Debt Securities -- Book-Entry Securities", owners of
beneficial interests in the book-entry securities will not be entitled to have
Notes represented by such book-entry securities registered in their names, will
not receive or be entitled to the physical delivery of such Notes in definitive
form, and will not be considered the owners or holders thereof under the
Subordinated Indenture.
DTC 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
created to hold securities of persons who have accounts with DTC and to
facilitate the clearance and settlement of participants. Such system eliminates
the need for physical movement of securities certificates. DTC's participants
include securities brokers and dealers (including the underwriters), banks,
trust companies, clearing corporations and certain other organizations, some of
which (and/or their representatives) own DTC. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
For additional information regarding the book-entry securities, see pages
7-8 of the accompanying prospectus under "Description of Debt Securities --
Book-Entry Securities".
Same-Day Settlement and Payment
Settlement for the Notes will be made in immediately available funds. We
will make all payments of principal and interest in immediately available funds.
The Notes will trade in the depositary's Same-Day Funds Settlement System until
maturity, and therefore the depositary will require secondary trading activity
to be settled in immediately available funds.
UNDERWRITING
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We are selling the Notes to the underwriters named below pursuant to an
underwriting agreement dated March 22, 2000. Subject to certain conditions, we
have agreed to sell to each of the underwriters, and each of the underwriters
has severally agreed to purchase, the principal amount of Notes set forth in the
following table:
Principal Amount
Underwriters of Notes
- ------------ ----------------
Lehman Brothers Inc. ................................... $150,000,000
Wachovia Securities, Inc. .............................. 150,000,000
------------
Total.................................... $300,000,000
============
Under the terms and conditions of the underwriting agreement, if the
underwriters take any of the Notes, then they are obligated to take and pay for
all of the Notes.
The underwriters propose initially to offer the Notes to the public at the
public offering price set forth on the cover page of this prospectus supplement.
After the initial public offering, the underwriters may change the public
offering price.
The Notes are a new issue of securities with no established trading market.
We have been advised by the underwriters that the underwriters intend to make a
market in the Notes, but they are not obligated to do so and may discontinue
market making at any time without notice. We cannot give any assurance as to the
liquidity of any trading market for the Notes.
In connection with the offering of the Notes, the underwriters may, to the
extent permitted by applicable law, engage in transactions that stabilize,
maintain or otherwise affect the price of the Notes. Specifically, the
underwriters may overallot in connection with the offering of the Notes,
creating a short position in the Notes for their own account. In addition, the
underwriters may bid for and purchase Notes in the open market to cover short
positions or to stabilize the price of the Notes. Finally, the underwriters may
reclaim selling concessions allowed for distributing the Notes in the offering,
if the underwriters repurchase previously distributed Notes in transactions to
cover short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market prices of the Notes above
independent market levels. The underwriters are not required to engage in any of
these activities and may end any of these activities at any time.
In the ordinary course of business certain of the underwriters and their
affiliates have engaged and may in the future engage in various other banking
and financial services for and commercial transactions with Wachovia and its
affiliates
Wachovia Securities, Inc. will participate in the underwriting arrangements
for the offering of the Notes. Accordingly, the offering will comply with the
requirements of Rule 2720 of the National Association of Securities Dealers,
Inc. (the "NASD") regarding an NASD member firm's participating in distributing
its affiliate's securities. NASD members participating in the offering of the
Notes will not confirm sales to discretionary accounts.
We have agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute payments which the underwriters may be required to make in
respect of such liabilities.
It is expected that delivery of the Notes will be made against payment
therefor on or about March 29, 2000, which is the fifth business day following
the date of this prospectus supplement (such settlement cycle being herein
referred to as "T+5"). Purchasers of Notes should note that the ability to
settle secondary market trades of the Notes effected on the date of pricing and
the succeeding business days may be affected by the T+5 settlement.
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LEGAL MATTERS
The validity of the Notes, as well as certain other legal matters, will be
passed upon for Wachovia by Kenneth W. McAllister, Esq., Senior Executive Vice
President and General Counsel of Wachovia. Certain legal matters will be passed
upon for the underwriters by Simpson Thacher & Bartlett, New York, New York. As
to matters of New York law, Mr. McAllister will rely on the opinion of Simpson
Thacher & Bartlett.
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$300,000,000
[LOGO OF WACHOVIA]
Wachovia Corporation
Subordinated Floating Rate Notes due May 2, 2005
---------------------
PROSPECTUS SUPPLEMENT
---------------------
Lehman Brothers
Wachovia Securities, Inc.
March 22, 2000
================================================================================
