PROSPECTUS Dated March 29, 1995 Pricing Supplement No. 51 to
PROSPECTUS SUPPLEMENT Registration Statement No. 33-57833
Dated March 29, 1995 February 20, 1996
Rule 424(b)(3)
$29,531,250
Morgan Stanley Group Inc.
MEDIUM-TERM NOTES, SERIES C
Senior Fixed Rate Notes
4.50% MANDATORILY EXCHANGEABLE NOTES DUE FEBRUARY 27, 1998
Mandatorily Exchangeable For Shares of Common Stock of
CONAGRA, INC.
The 4.50% Mandatorily Exchangeable Notes due February 27, 1998 (the "Notes")
are Medium-Term Notes, Series C (Senior Fixed Rate Notes) of Morgan Stanley
Group Inc. (the "Company"), as further described below and in the Prospectus
Supplement under "Description of Notes - Fixed Rate Notes."
The principal amount of each of the Notes being offered hereby will be $43.75
(the "Initial Price"). The Notes will mature on February 27, 1998. Interest
on the Notes, at the rate of 4.50% of the principal amount per annum, is
payable quarterly in arrears on each February 28, May 30, August 30 and
November 30, beginning May 30, 1996.
At maturity (including as a result of acceleration or otherwise), the
principal amount of each Note will be mandatorily exchanged by the Company
into a number of shares of the common stock, par value $5 per share (the
"ConAgra Stock"), of ConAgra, Inc. ("ConAgra") (or at the Company's option,
cash with an equal value in the case of clause (b) below) at the Exchange
Rate. The Exchange Rate is equal to, subject to certain adjustments, (a) if
the product of the Exchange Factor (as defined below) and the Market Price (as
defined herein) per share of ConAgra Stock determined as of the maturity of the
Notes (the "Maturity Price") is greater than or equal to $48.78 (the
"Threshold Appreciation Price"), 0.896884 of the product of the Exchange
Factor and one share of ConAgra Stock per Note, (b) if the Maturity Price is
less than the Threshold Appreciation Price but is greater than the Initial
Price, a fraction of the product of the Exchange Factor and one share of
ConAgra Stock so that the value of such fraction (determined at the Maturity
Price) equals the Initial Price and (c) if the Maturity Price is less than or
equal to the Initial Price, the product of the Exchange Factor and one share
of ConAgra Stock per Note. The Exchange Factor will be set initially at 1.0,
but will be subject to adjustment upon the occurrence of certain corporate
events. Because the Exchange Rate varies depending on the Maturity Price,
holders of the Notes will not necessarily receive at maturity an amount equal
to the principal amount thereof. See "Exchange at Maturity," "Exchange
Factor" and "Antidilution Adjustments" in this Pricing Supplement.
Interest on the Notes will accrue at a higher rate than the rate at which
dividends have been paid on the ConAgra Stock. The opportunity for equity
appreciation afforded by an investment in the Notes is less than that afforded
by an investment in the ConAgra Stock because at maturity a holder may receive
less than one share of ConAgra Stock per Note. The value of the ConAgra Stock
received by a holder of the Notes upon exchange at maturity, determined as
described herein, may be more or less than the principal amount of the Notes.
ConAgra is not affiliated with the Company, is not involved in this offering
of Notes and will have no obligations with respect to the Notes. See
"Historical Information" in this Pricing Supplement for information on the
range of Market Prices for ConAgra Stock.
The Company will cause the Market Price, any adjustments to the Exchange
Factor and any other antidilution adjustments to be determined by the
Calculation Agent for Chemical Bank, as Trustee under the Senior Debt
Indenture.
An investment in the Notes entails risks not associated with similar
investments in a conventional debt security, as described under "Risk Factors"
on PS-4 and PS-5 herein.
PRICE 100% AND ACCRUED INTEREST
Proceeds to
Agent's ----------------
Price to Public(1) Commissions(2) Company(1)
-------------------- ---------------- ----------------
Per Note.... 100% 0.25% 99.75%
Total....... $29,531,250 $73,828.13 $29,457,421.87
_______________
(1) Plus accrued interest, if any, from February 27, 1996.
(2) The Company has agreed to indemnify the Agent against certain liabilities,
including liabilities under the Securities Act of 1933.
MORGAN STANLEY & CO.
Incorporated
Capitalized terms not defined herein have the meanings given to such terms in
the accompanying Prospectus Supplement.
Principal Amount:.............. $29,531,250
Maturity Date:................. February 27, 1998
Interest Rate:................. 4.50% per annum
Interest Payment Dates......... February 28, May 30, August 30 and November 30
Specified Currency:............ U.S. Dollars
Issue Price:................... 100%
Original Issue Date (Settlement
Date):....................... February 27, 1996
Book Entry Note or Certificated
Note:........................ Book Entry
Senior Note or Subordinated
Note:........................ Senior
Denominations:................. $43.75 and integral multiples thereof
Trustee:....................... Chemical Bank
Exchange at Maturity:.......... At maturity (including as a result of
acceleration or otherwise), the principal
amount of each Note will be mandatorily
exchanged by the Company, upon delivery of
such Note to the Trustee, into a number of
shares of ConAgra Stock at the Exchange Rate
(or, at the Company's option in the case of
clause (b) below, cash equal to $43.75 per
Note). The Exchange Rate is equal to (a) if
the Maturity Price (as defined below) is
greater than or equal to $48.78 (the
"Threshold Appreciation Price"), 0.896884 of
the product of the Exchange Factor (as
defined below) and one share of ConAgra Stock
per Note, (b) if the Maturity Price is less
than the Threshold Appreciation Price but is
greater than the Initial Price, a fraction of
the product of the Exchange Factor and one
share of ConAgra Stock so that the value of
such fraction (determined at the Maturity
Price) equals the Initial Price and (c) if
the Maturity Price is less than or equal to
the Initial Price, the product of the
Exchange Factor and one share of ConAgra
Stock per Note, subject in each case to any
applicable antidilution adjustments as set
forth under "Antidilution Adjustments" below.
The Company shall, or shall cause the
Calculation Agent to, deliver such shares of
ConAgra Stock or cash to the Trustee for
delivery to the holders. The Calculation
Agent shall calculate the Exchange Factor and
determine the Exchange Rate applicable at the
maturity of the Notes. References to payment
"per Note" refer to each $43.75 principal
amount of any Note.
No Fractional Shares:.......... Upon mandatory exchange of the Notes, the
Company will pay cash in lieu of issuing
fractional shares of ConAgra Stock in an
amount equal to the corresponding fractional
Market Price as of the maturity of the Notes.
Exchange Factor:............... The Exchange Factor will be set initially at
1.0, but will be subject to adjustment upon
the occurrence of certain corporate events
through and including the second NYSE Trading
Day immediately prior to maturity. See
"Antidilution Adjustments" below.
Initial Price:................. $43.75
Maturity Price:................ Maturity Price means the product of (i) the
Market Price of one share of ConAgra Stock
and (ii) the Exchange Factor, each determined
as of the second NYSE Trading Day immediately
prior to maturity.
Market Price:.................. If ConAgra Stock (or any other security for
which a Market Price must be determined) is
listed on a national securities exchange, is a
security of The Nasdaq National Market
("NASDAQ NMS") or is included in the OTC
Bulletin Board Service ("OTC Bulletin Board")
operated by the National Association of
Securities Dealers, Inc. (the "NASD"), the
Market Price for one share of ConAgra Stock
(or one unit of any such other security) on
any NYSE Trading Day means (i) the last
reported sale price, regular way, on such day
on the principal United States securities
exchange registered under the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"), on which ConAgra Stock is
listed or admitted to trading or (ii) if not
listed or admitted to trading on any such
securities exchange or if such last reported
sale price is not obtainable, the last
reported sale price on the over-the-counter
market as reported on the NASDAQ NMS or OTC
Bulletin Board on such day. If the last
reported sale price is not available pursuant
to clause (i) or (ii) of the preceding
sentence, the Market Price for any NYSE
Trading Day shall be the mean, as determined
by the Calculation Agent, of the bid prices
for ConAgra Stock obtained from as many
dealers in such stock, but not exceeding
three, as will make such bid prices available
to the Calculation Agent. The term "NASDAQ
NMS security" shall include a security
included in any successor to such system and
the term "OTC Bulletin Board Service" shall
include any successor service thereto.
NYSE Trading Day:.............. A day on which trading is generally conducted
in the over-the-counter market for equity
securities in the United States and on the
New York Stock Exchange, as determined by the
Calculation Agent, and on which a Market
Disruption Event (as defined below) has not
occurred.
Calculation Agent:............. Morgan Stanley & Co. Incorporated ("MS & Co.")
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain determinations and
judgments that the Calculation Agent must make
in making adjustments to the Exchange Factor
or other antidilution adjustments or
determining any Market Price or whether a
Market Disruption Event has occurred. See
"Antidilution Adjustments" and "Market
Disruption Event" below. MS & Co. is
obligated to carry out its duties and
functions as Calculation Agent in good faith
and using its reasonable judgment.
Risk Factors:.................. An investment in the Notes entails
significant risks not associated with similar
investments in a conventional debt security,
including the following:
The Notes combine features of equity and debt
instruments. Accordingly, the terms of the
Notes differ from those of ordinary debt
securities in that the value of the ConAgra
Stock that a holder of the Notes will receive
upon mandatory exchange of the principal
amount thereof at maturity is not fixed, but
is based on the price of the ConAgra Stock
and the Exchange Rate as determined at such
price. Because the price of the ConAgra
Stock is subject to market fluctuations, the
value of the ConAgra Stock received by a
holder of Notes upon exchange at maturity,
determined as described herein, may be more
or less than the principal amount of the
Notes. If the Maturity Price of the ConAgra
Stock is less than the Initial Price, the
amount receivable upon exchange will be less
than the principal amount of the Notes, in
which case an investment in the Notes may
result in a loss.
The opportunity for equity appreciation
afforded by an investment in the Notes is
less than that afforded by an investment in
the ConAgra Stock because at maturity a
holder will receive less than one share of
ConAgra Stock per Note if the value of such
ConAgra Stock (as adjusted by the Exchange
Factor) has appreciated above the Initial
Price.
Although the amount that holders of the Notes
are entitled to receive at maturity is
subject to adjustment for certain corporate
events, such adjustments do not cover all
events that could affect the Market Price of
the ConAgra Stock, including, without
limitation, the occurrence of a partial
tender or exchange offer for the ConAgra
Stock by ConAgra or any third party. Such
other events may adversely affect the market
value of the Notes.
There can be no assurance as to how the Notes
will trade in the secondary market or whether
such market will be liquid or illiquid.
Securities with characteristics similar to
the Notes are novel securities, and there is
currently no secondary market for the Notes.
The market value for the Notes will be
affected by a number of factors in addition
to the creditworthiness of the Company and the
value of ConAgra Stock, including, but not
limited to, the volatility of ConAgra Stock,
the dividend rate on ConAgra Stock, market
interest and yield rates and the time
remaining to the maturity of the Notes. In
addition, the value of ConAgra Stock depends
on a number of interrelated factors,
including economic, financial and political
events, that can affect the capital markets
generally and the market segment of which
ConAgra is a part and over which the Company
has no control. The market value of the
Notes is expected to depend primarily on
changes in the Market Price of ConAgra Stock.
The price at which a holder will be able to
sell Notes prior to maturity may be at a
discount, which could be substantial, from
the principal amount thereof, if, at such
time, the Market Price of ConAgra Stock is
below, equal to or not sufficiently above the
Initial Price. The historical Market Prices
of ConAgra Stock should not be taken as an
indication of ConAgra Stock's future
performance during the term of any Note.
The Notes will not be listed on any national
securities exchange or accepted for quotation
on a trading market and, as a result, pricing
information for the Notes may be difficult to
obtain.
The Company is not affiliated with ConAgra
and, although the Company as of the date of
this Pricing Supplement does not have any
material non-public information concerning
ConAgra, corporate events of ConAgra,
including those described below in
"Antidilution Adjustments," are beyond the
Company's ability to control and are
difficult to predict.
ConAgra is not involved in the offering of
the Notes and has no obligations with respect
to the Notes, including any obligation to take
the interests of the Company or of holders of
Notes into consideration for any reason.
ConAgra will not receive any of the proceeds
of the offering of the Notes made hereby and
is not responsible for, and has not
participated in, the determination of the
timing of, prices for or quantities of, the
Notes offered hereby.
Holders of the Notes will not be entitled to
any rights with respect to the ConAgra Stock
(including, without limitation, voting
rights, the rights to receive any dividends
or other distributions in respect thereof and
the right to tender or exchange ConAgra Stock
in any partial tender or exchange offer by
ConAgra or any third party) until such time
as the Company shall deliver shares of
ConAgra Stock to holders of the Notes at
maturity.
Because the Calculation Agent is an affiliate
of the Company, potential conflicts of
interest may exist between the Calculation
Agent and the holders of the Notes, including
with respect to certain adjustments to the
Exchange Factor and other antidilution
adjustments that may influence the
determination of the amount of ConAgra Stock
or other property receivable at the maturity
of the Notes. See "Antidilution Adjustments"
and "Market Disruption Event."
It is suggested that prospective investors
who consider purchasing the Notes should
reach an investment decision only after
carefully considering the suitability of the
Notes in light of their particular
circumstances.
Investors should also consider the tax
consequences of investing in the Notes. See
"United States Federal Taxation" below.
Antidilution Adjustments:...... The Exchange Factor (and, in the case of
paragraph 5 below, the determination of the
Exchange Rate) will be adjusted as follows:
1. If ConAgra Stock is subject to a stock
split or reverse stock split, then once such
split has become effective, the Exchange
Factor will be adjusted to equal the product
of the prior Exchange Factor and the number
of shares issued in such stock split or
reverse stock split with respect to one share
of ConAgra Stock.
2. If ConAgra Stock is subject to a stock
dividend (issuance of additional shares of
ConAgra Stock) that is given ratably to all
holders of shares of ConAgra Stock, then once
the dividend has become effective and ConAgra
Stock is trading ex-dividend, the Exchange
Factor will be adjusted so that the new
Exchange Factor shall equal the prior
Exchange Factor plus the product of (i) the
number of shares issued with respect to one
share of ConAgra Stock and (ii) the prior
Exchange Factor.
3. There will be no adjustments to the
Exchange Factor to reflect cash dividends or
other distributions paid with respect to
ConAgra Stock other than distributions
described in clause (v) of paragraph 5 below
and Extraordinary Dividends as described
below. A cash dividend or other distribution
with respect to ConAgra Stock will be deemed
to be an "Extraordinary Dividend" if such
dividend or other distribution exceeds the
immediately preceding non-Extraordinary
Dividend for ConAgra Stock by an amount equal
to at least 6% of the Market Price of ConAgra
Stock on the NYSE Trading Day preceding the
ex-dividend date for the payment of such
Extraordinary Dividend (the "ex-dividend
date"). If an Extraordinary Dividend occurs
with respect to ConAgra Stock, the Exchange
Factor with respect to ConAgra Stock will be
adjusted on the ex-dividend date with respect
to such Extraordinary Dividend so that the
new Exchange Factor will equal the product of
(i) the then current Exchange Factor and (ii)
a fraction, the numerator of which is the
Market Price on the NYSE Trading Day
preceding the ex-dividend date, and the
denominator of which is the amount by which
the Market Price on the NYSE Trading Day
preceding the ex-dividend date exceeds the
Extraordinary Dividend Amount. The
"Extraordinary Dividend Amount" with respect
to an Extraordinary Dividend for ConAgra
Stock will equal (i) in the case of cash
dividends or other distributions that
constitute quarterly dividends, the amount
per share of such Extraordinary Dividend
minus the amount per share of the immediately
preceding non-Extraordinary Dividend for
ConAgra Stock or (ii) in the case of cash
dividends or other distributions that do not
constitute quarterly dividends, the amount
per share of such Extraordinary Dividend. To
the extent an Extraordinary Dividend is not
paid in cash, the value of the non-cash
component will be determined by the
Calculation Agent, whose determination shall
be conclusive. A distribution on the ConAgra
Stock described in clause (v) of paragraph 5
below that also constitutes an Extraordinary
Dividend shall only cause an adjustment to
the Exchange Factor pursuant to clause (v) of
paragraph 5.
4. If ConAgra issues rights or warrants to
all holders of ConAgra Stock to subscribe for
or purchase ConAgra Stock at an exercise
price per share less than the Market Price of
the ConAgra Stock on (i) the date the
exercise price of such rights or warrants is
determined and (ii) the expiration date of
such rights or warrants, and if the
expiration date of such rights or warrants
precedes the maturity of the Notes, then the
Exchange Factor will be adjusted to equal the
product of the prior Exchange Factor and a
fraction, the numerator of which shall be the
number of shares of ConAgra Stock outstanding
on the date of issuance of such rights or
warrants, immediately prior to such issuance,
plus the number of additional shares of
ConAgra Stock offered for subscription or
purchase pursuant to such rights or warrants
and the denominator of which shall be the
number of shares of ConAgra Stock outstanding
on the date of issuance of such rights or
warrants, immediately prior to such issuance,
plus the number of additional shares of
ConAgra Stock which the aggregate offering
price of the total number of shares of
ConAgra Stock so offered for subscription or
purchase pursuant to such rights or warrants
would purchase at the Market Price on the
expiration date of such rights or warrants,
which shall be determined by multiplying such
total number of shares offered by the
exercise price of such rights or warrants and
dividing the product so obtained by such
Market Price.
5. If (i) there occurs any reclassification
or change of ConAgra Stock, (ii) ConAgra, or
any surviving entity or subsequent surviving
entity of ConAgra (a "ConAgra Successor") has
been subject to a merger, combination or
consolidation and is not the surviving entity,
(iii) any statutory exchange of securities of
ConAgra or any ConAgra Successor with another
corporation occurs (other than pursuant to
clause (ii) above), (iv) ConAgra is
liquidated, (v) ConAgra issues to all of its
shareholders equity securities of an issuer
other than ConAgra (other than in a
transaction described in clauses (ii), (iii)
or (iv) above) (a "Spin-off Event") or (vi) a
tender or exchange offer is consummated for
all the outstanding shares of ConAgra Stock
(any such event in clauses (i) through (vi) a
"Reorganization Event"), the method of
determining the Exchange Rate in respect of
the amount payable upon exchange at maturity
for each Note will be adjusted to provide
that each holder of Notes will receive at
maturity, in respect of the principal amount
of each Note, securities, cash or any other
assets distributed in any such Reorganization
Event, including, in the case of a Spin-off
Event, the share of ConAgra Stock with
respect to which the spun-off security was
issued (collectively, the "Exchange
Property") (or cash, in the case of clause
(b) below) in an amount equal to (a) if the
Transaction Value (as defined below) is
greater than or equal to the Threshold
Appreciation Price, 0.896884 multiplied by
the Transaction Value, (b) if the Transaction
Value is less than the Threshold Appreciation
Price but greater than the Initial Price, the
Initial Price and (c) if the Transaction
Value is less than or equal to the Initial
Price, the Transaction Value; provided that,
if the Exchange Property received in any such
Reorganization Event consists only of cash,
the maturity date of the Notes will be deemed
to be accelerated to the date on which such
cash is distributed to holders of ConAgra
Stock. If Exchange Property consists of more
than one type of property, holders of Notes
will receive at maturity a pro rata share of
each such type of Exchange Property.
"Transaction Value" means (i) for any cash
received in any such Reorganization Event,
the amount of cash received per share of
ConAgra Stock, as adjusted by the Exchange
Factor, (ii) for any property other than cash
or securities received in any such
Reorganization Event, the market value of such
Exchange Property received for each share of
ConAgra Stock at the date of the receipt of
such Exchange Property, as adjusted by the
Exchange Factor, as determined by the
Calculation Agent and (iii) for any security
received in any such Reorganization Event, an
amount equal to the Market Price per share of
such security at the maturity of the Notes
multiplied by the quantity of such security
received for each share of ConAgra Stock, as
adjusted by the Exchange Factor.
For purposes of paragraph 5 above, in the
case of a consummated tender or exchange
offer for all Exchange Property of a
particular type, Exchange Property shall be
deemed to include the amount of cash or other
property paid by the offeror in the tender or
exchange offer with respect to such Exchange
Property (in an amount determined on the
basis of the rate of exchange in such tender
or exchange offer). In the event of a tender
or exchange offer with respect to Exchange
Property in which an offeree may elect to
receive cash or other property, Exchange
Property shall be deemed to include the kind
and amount of cash and other property received
by offerees who elect to receive cash.
No adjustments to the Exchange Factor or
Exchange Rate will be required unless such
adjustment would require a change of at least
0.1% in the Exchange Factor or Exchange Rate
then in effect. The Exchange Factor or
Exchange Rate resulting from any of the
adjustments specified above will be rounded
to the nearest one thousandth with five
ten-thousandths being rounded upward.
No adjustments to the Exchange Factor or
Exchange Rate will be made other than those
specified above. The adjustments specified
above do not cover all events that could
affect the Market Price of the ConAgra Stock,
including, without limitation, a partial
tender or exchange offer for the ConAgra
Stock.
The Calculation Agent shall be solely
responsible for the determination and
calculation of any adjustments to the Exchange
Factor or Exchange Rate and of any related
determinations and calculations with respect
to any distributions of stock, other
securities or other property or assets
(including cash) in connection with any
corporate event described in paragraph 5
above, and its determinations and
calculations with respect thereto shall be
conclusive.
The Calculation Agent will provide
information as to any adjustments to the
Exchange Factor or Exchange Rate upon written
request by any holder of the Notes.
Market Disruption Event:....... "Market Disruption Event" means, with respect
to ConAgra Stock:
(i) a suspension, absence or material
limitation of trading of ConAgra Stock on the
primary market for ConAgra Stock for more
than two hours of trading or during the
one-half hour period preceding the close of
trading in such market; or the suspension or
material limitation on the primary market for
trading in options contracts related to
ConAgra Stock, if available, during the
one-half hour period preceding the close of
trading in the applicable market, in each
case as determined by the Calculation Agent
in its sole discretion; and
(ii) a determination by the Calculation
Agent in its sole discretion that the event
described in clause (i) above materially
interfered with the ability of the Company or
any of its affiliates to unwind all or a
material portion of the hedge with respect to
the Notes.
For purposes of determining whether a Market
Disruption Event has occurred: (1) a
limitation on the hours or number of days of
trading will not constitute a Market
Disruption Event if it results from an
announced change in the regular business
hours of the relevant exchange, (2) a
decision to permanently discontinue trading
in the relevant option contract will not
constitute a Market Disruption Event, (3)
limitations pursuant to New York Stock
Exchange Rule 80A (or any applicable rule or
regulation enacted or promulgated by the New
York Stock Exchange, any other self-regulatory
organization or the Securities and Exchange
Commission of similar scope as determined by
the Calculation Agent) on trading during
significant market fluctuations shall
constitute a Market Disruption Event, (4) a
suspension of trading in an options contract
on ConAgra Stock by the primary securities
market trading in such options, if available,
by reason of (x) a price change exceeding
limits set by such securities exchange or
market, (y) an imbalance of orders relating
to such contracts or (z) a disparity in bid
and ask quotes relating to such contracts
will constitute a suspension or material
limitation of trading in options contracts
related to ConAgra Stock and (5) an "absence
of trading" on the primary securities market
on which options contracts related to ConAgra
Stock are traded will not include any time
when such securities market is itself closed
for trading under ordinary circumstances.
ConAgra Stock; Public
Information ................. ConAgra Stock is registered under the
Exchange Act. Companies with securities
registered under the Exchange Act are
required to file periodically certain
financial and other information specified by
the Securities and Exchange Commission (the
"Commission"). Information provided to or
filed with the Commission is available at the
offices of the Commission specified under
"Available Information" in the accompanying
Prospectus. In addition, information
regarding ConAgra may be obtained from other
sources including, but not limited to, press
releases, newspaper articles and other
publicly disseminated documents. The Company
makes no representation or warranty as to the
accuracy or completeness of such reports.
THIS PRICING SUPPLEMENT RELATES ONLY TO THE
NOTES OFFERED HEREBY AND DOES NOT RELATE TO
CONAGRA STOCK OR OTHER SECURITIES OF CONAGRA.
ALL DISCLOSURES CONTAINED IN THIS PRICING
SUPPLEMENT REGARDING CONAGRA ARE DERIVED FROM
THE PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN
THE PRECEDING PARAGRAPH. NEITHER THE COMPANY
NOR THE AGENT HAS PARTICIPATED IN THE
PREPARATION OF SUCH DOCUMENTS OR MADE ANY DUE
DILIGENCE INQUIRY WITH RESPECT TO CONAGRA.
NEITHER THE COMPANY NOR THE AGENT MAKES ANY
REPRESENTATION THAT SUCH PUBLICLY AVAILABLE
DOCUMENTS OR ANY OTHER PUBLICLY AVAILABLE
INFORMATION REGARDING CONAGRA ARE ACCURATE OR
COMPLETE. FURTHERMORE, THERE CAN BE NO
ASSURANCE THAT ALL EVENTS OCCURRING PRIOR TO
THE DATE HEREOF (INCLUDING EVENTS THAT WOULD
AFFECT THE ACCURACY OR COMPLETENESS OF THE
PUBLICLY AVAILABLE DOCUMENTS DESCRIBED IN THE
PRECEDING PARAGRAPH) THAT WOULD AFFECT THE
TRADING PRICE OF CONAGRA STOCK (AND THEREFORE
THE INITIAL PRICE, THE THRESHOLD APPRECIATION
PRICE AND THE EXCHANGE RATE APPLICABLE ABOVE
THE THRESHOLD APPRECIATION PRICE) HAVE BEEN
PUBLICLY DISCLOSED. SUBSEQUENT DISCLOSURE OF
ANY SUCH EVENTS OR THE DISCLOSURE OF OR
FAILURE TO DISCLOSE MATERIAL FUTURE EVENTS
CONCERNING CONAGRA COULD AFFECT THE VALUE
RECEIVED AT MATURITY WITH RESPECT TO THE
NOTES AND THEREFORE THE TRADING PRICES OF THE
NOTES.
NEITHER THE COMPANY NOR ANY OF ITS AFFILIATES
MAKE ANY REPRESENTATION TO ANY PURCHASER OF
NOTES AS TO THE PERFORMANCE OF CONAGRA STOCK.
The Company or its affiliates may presently
or from time to time engage in business with
ConAgra including extending loans to, or
making equity investments in, ConAgra or
providing advisory services to ConAgra,
including merger and acquisition advisory
services. In the course of such business,
the Company or its affiliates may acquire
non-public information with respect to
ConAgra and, in addition, one or more
affiliates of the Company may publish
research reports with respect to ConAgra. The
Company does not make any representation to
any purchaser of Notes with respect to any
matters whatsoever relating to ConAgra. Any
prospective purchaser of a Note should
undertake an independent investigation of
ConAgra as in its judgment is appropriate to
make an informed decision with respect to an
investment in ConAgra Stock.
Historical Information......... The following table sets forth the high and
low Market Price during 1993, 1994, 1995, and
during 1996 through February 1, 1996. The
Market Price on February 20, 1996 was $43.75.
The Market 2rices listed below have been
derived from publicly disseminated
information that the Company believes to be
accurate. Neither the Company nor the Agent
makes any representation as to the accuracy
of such information. The historical prices
of ConAgra Stock should not be taken as an
indication of future performance, and no
assurance can be given that the price of
ConAgra Stock will not decrease so that the
beneficial owners of the Notes will receive at
maturity shares of ConAgra Stock worth less
than the principal amount of the Notes. Nor
can assurance be given that the price of
ConAgra Stock will increase above the
Threshold Appreciation Price so that at
maturity the beneficial owners of the Notes
will receive an amount in excess of the
principal amount of the Notes.
Dividends
ConAgra High Low Per Share
- ----------------------- --------- --------- -----------
(CUSIP #20588710)
1993:
First Quarter.......... 33 1/8 25 5/8 .155
Second Quarter......... 27 3/8 22 7/8 .155
Third Quarter.......... 26 1/8 23 .155
Fourth Quarter......... 27 7/8 25 1/8 .18
1994:
First Quarter.......... 28 1/2 25 5/8 .18
Second Quarter......... 30 5/8 26 3/8 .18
Third Quarter.......... 33 29 5/8 .18
Fourth Quarter......... 32 5/8 30 .2075
1995:
First Quarter.......... 34 1/4 30 1/4 .2075
Second Quarter......... 35 31 3/8 .2075
Third Quarter.......... 40 35 1/8 .2075
Fourth Quarter......... 41 1/2 38 1/4 .2375
1996:
First Quarter
Through February
20, 1996.............. 46 7/8 42 1/8 .2375
Use of Proceeds and Hedging:... The net proceeds to be received by the
Company from the sale of the Notes will be
used for general corporate purposes and, in
part, by the Company or one or more of its
affiliates in connection with hedging the
Company's obligations under the Notes. See
also "Use of Proceeds" in the accompanying
Prospectus.
On the date of this Pricing Supplement, the
Company, through its subsidiaries and others,
hedged its anticipated exposure in connection
with the Notes by taking positions in ConAgra
Stock. Such hedging was carried out in a
manner designed to minimize any impact on the
price of ConAgra Stock. Purchase activity
could potentially have increased the price of
ConAgra Stock, and therefore effectively
increase the level to which ConAgra Stock
must rise before a holder of a Note would
receive at maturity an amount of ConAgra Stock
worth as much as or more than the principal
amount of the Notes. Although the Company
has no reason to believe that its hedging
activity had a material impact on the price
of ConAgra Stock, there can be no assurance
that the Company did not affect such price as
a result of its hedging activities. The
Company, through its subsidiaries, is likely
to modify its hedge position throughout the
life of the Notes by purchasing and selling
ConAgra Stock, options contracts on ConAgra
Stock listed on major securities markets or
positions in any other instruments that it
may wish to use in connection with such
hedging.
United States Federal Taxation: The following discussion, to the extent it
contains legal conclusions, is based on the
opinion of Davis Polk & Wardwell, special tax
counsel to the Company. This discussion
supplements the "United States Federal
Taxation" section in the accompanying
Prospectus Supplement and should be read in
conjunction therewith. Any limitations on
disclosure and any defined terms contained
therein are equally applicable to the summary
below. Because of the absence of authority
on point, there are substantial uncertainties
regarding the U.S. federal income tax
consequences of an investment in the Notes.
The Company intends to treat the Notes as
indebtedness of the Company and such
treatment is binding on the Company and on all
holders except for holders who disclose on
their tax returns that they are treating the
Notes in a manner that is inconsistent with
the Company's treatment of the Notes. The
Company's treatment is not, however, binding
upon the Internal Revenue Service or the
courts, and there can be no assurance that it
will be accepted.
The Company presently intends to treat the
coupon interest on the Notes as reportable
interest. Under this approach, such interest
would 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 United States income tax purposes.
Although proposed Treasury regulations
addressing the treatment of contingent debt
instruments were issued on December 15, 1994,
such regulations, which generally would
require current accrual of contingent amounts
and would affect the character of gain on the
sale, exchange or retirement of debt, by
their terms apply only to debt instruments
issued on or after the 60th day after the
regulations are finalized.
Under general United States federal income
tax principles, upon maturity of a Note, a
United States Holder will recognize gain or
loss, if any, equal to the difference between
the amount realized at maturity and such
Holder's tax basis in the Note. Any loss
recognized upon maturity will be capital
loss. It is unclear under existing law
whether gain recognized at maturity will be
treated as ordinary or capital in character.
Subject to further guidance from the Internal
Revenue Service, however, the Company does not
presently intend to treat such gain as
reportable interest income. Prospective
investors should consult with their tax
advisors regarding the character of gain
recognized at maturity.
United States Holders that have acquired debt
instruments similar to the Notes and have
accounted for such debt instruments under
proposed, but subsequently withdrawn,
Treasury regulations may be deemed to have
established a method of accounting that must
be followed with respect to the Notes, unless
consent of the Commissioner of the Internal
Revenue Service is obtained to change such
method. Absent such consent, such a Holder
would be required to account for the Notes in
the manner prescribed in such withdrawn
Treasury regulations. The Internal Revenue
Service, however, would not be required to
accept such method as correct.
Any gain or loss recognized on the sale or
exchange of a Note prior to maturity will be
treated as capital in character.
There can be no assurance that the ultimate
tax treatment of the Notes would not differ
significantly from the description herein.
Prospective investors are urged to consult
their tax advisors as to the possible
consequences of holding the Notes.
See also "United States Federal Taxation" in
the accompanying Prospectus Supplement.
