January 10, 1997
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549
RE: PHH CORPORATION (REGISTRATION NO. 33-63627)
Gentlemen:
On behalf of PHH Corporation and pursuant to Rule 424 (b) (3) under the
Securities Act of 1933 as amended, we are transmitting herewith for filing one
copy of the Pricing Supplement dated January 8, 1997 to the Prospectus
Supplement and Prospectus dated November 8, 1995 of PHH Corporation.
Very Truly Yours
Mark E. Johnson
Assistant Treasurer
Issued pursuant Pricing Supplement and Abbreviated Term Rule 424 (b) (3)
to Rule 434 Sheet Dated January 8, 1997 (To Prospectus File No. 33-63627
<PAGE>
dated November 8, 1995 and Prospectus
Supplement dated November 8, 1995)
PHH CORPORATION
Medium-Term Notes
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
Principal Amount: $35,000,000 Trade date: January 8, 1997
Currency or Currency Unit: U.S. Dollars Original Issue Date: January 15, 1997
Issue Price: See Below Agent's Discount or Commission: 0.00%
Net Proceeds to Issuer: $35,000,000 Agent (s): Merrill Lynch & Co.
Maturity Date: January 15, 1998 CUSIP Number: 69332H DT 0
- ---------------------------------------------------------------------------------------------
</TABLE>
Interest:
Fixed Rate:
Floating Rate:
Base Rate: [ ] Commercial Paper Rate (30 day H.15, MMY) [ ] CD Rate
[ ] Federal Funds Effective Rate
[X] LIBOR [ ] Treasury Rate [ ] Prime Rate [ ] Other
( ) Reuters Page: (see attached)
------------------
(x) Telerate Page: 3750
----------------
Spread: none
Initial Interest Rate: To be determined January 13, 1997
Interest Reset Dates: Monthly, on the 15th of each month commencing
February 18th, 1997
Interest Determination Date: Two London Banking Days prior to Interest Reset
Date
Interest Payment Dates: Monthly, on the 15th of each month commencing
February 18th, 1997
Index Maturity: 1 month
Day Count Convention: [X] Actual/360 [ ] Actual/Actual [ ] 30/360
Option to Receive Payments in Specified Currency: [ ] Yes [ ] No
Redemption:
[X] The Notes may not be redeemed prior to maturity, except as set
forth in the Prospectus.
[ ] The Notes may be redeemed prior to maturity.
Initial Redemption Date:
Initial Redemption Price: %
------------------
Annual Redemption Price Reduction: % until Redemption
------------------
Price is 100% of the Principal Amount.
Repayment:
[X] The Notes may not be repaid prior to maturity, except as set forth
in the Prospectus.
[ ] The Notes may be repaid prior to maturity at the option of the
holder of the Notes.
Repayment Date:
Repayment Price: %
Discount Note: [ ] Yes [X] No
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period:
Form: [X] Global [ ] Certificated
Agent's Capacity: [ ] Agent [X] Principal
If as Principal:
[X] The Agent proposes to offer the Notes from time to time for resale
in negotiated transactions or otherwise, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or at negotiated
prices.
[ ] The Agent proposes to offer the Notes at a fixed initial public
offering price of % of Principal Amount.
------------------
If as Agent:
The Notes are being offered at a fixed initial public offering price
of % of Principal Amount.
------------------
Other Terms:
Recent Developments
(see next page)
page 1 of 2
RECENT DEVELOPMENTS
<PAGE>
Reference is made to the Company's Report on Form 8-K dated November
15, 1996 reporting an Agreement and Plan of Merger with HFS Incorporated ("HFS")
under which, subject to the conditions of the agreement, the Company would
become a wholly-owned subsidiary of HFS. Conditions of the merger include
shareholder approval by the shareholders of both companies, certain regulatory
approvals or consents and the required consents of bank creditors of both HFS
and the Company. Consummation is now expected in mid-March, 1997.
HFS has stated its intention to maintain the Company as a separate
subsidiary, continuing to carry on its own financing activities for its major
lines of business after the merger. In this regard, HFS has stated its
intentions to enter into arrangements, effective with the merger, which would
(a) limit payments of dividends and other restricted payments, such as loans and
advances, from the Company to HFS to an amount not to exceed 40% of the
Company's consolidated net income and (b) to limit the Company's consolidated
Debt to Equity Ratio to not exceeding eight (8) to one (1). Following
announcement of the merger, on or about November 11, 1996, Moody's, S&P and
Fitch announced that they had placed under surveillance or review their ratings
of the Company's debt securities. On December 13, 1996 and December 19, 1996,
S&P and Fitch, respectively, reaffirmed their previous A+ senior debt ratings
after considering HFS's stated intentions. As of the date of this Supplement,
Moody's had not announced any action with respect to its rating of the Company's
debt securities. HFS has advised the Company that, in its opinion, it will be
able to secure the requisite consents of its lenders to the proposed merger and
that these intended limitations concerning distributions and leverage with
respect to the Company will not interfere with its ability to secure such
consents.
------------------------------
PHH Corporation
Pricing Supplement and Abbreviated Term
Sheet Dated January 8, 1997 (To Prospectus
dated November 8, 1995 and Prospectus
Supplement dated November 8, 1995)
page 2 of 2
