<PAGE> 1
PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(2)
(TO PROSPECTUS DATED NOVEMBER 9, 1994) Registration Number 33-55949
[ASSOCIATES CORPORATION OF NORTH AMERICA LOGO]
$1,500,000,000
MEDIUM TERM SENIOR NOTES, SERIES H
AND
MEDIUM TERM SUBORDINATED NOTES, SERIES A
DUE FROM 9 MONTHS TO 20 YEARS FROM DATE OF ISSUE
Associates Corporation of North America may offer from time to time its
Medium Term Senior Notes, Series H (the "Senior Notes") and Medium Term
Subordinated Notes, Series A (the "Subordinated Notes") in a combined initial
public offering price or purchase price of up to $1,500,000,000, subject to
change. The Senior Notes and Subordinated Notes are collectively referred to
herein as the "Notes". Each Note will mature on any business day from nine
months to twenty years from the date of issue, as selected by the purchaser and
agreed to by the Company. Unless otherwise provided in the applicable Pricing
Supplement, the Notes will not be subject to any sinking fund or to redemption
prior to maturity. The Notes will be issued only in fully registered form in
denominations of $100,000, or any amount in excess thereof which is an integral
multiple of $1,000.
Each Note will be represented either by a Global Security registered in the
name of a nominee of The Depository Trust Company, as Depositary (a "Book-Entry
Note"), or by a certificate issued in definitive form (a "Certificated Note"),
as set forth in the applicable Pricing Supplement. Beneficial interests in
Global Securities representing Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary and
its participants. Book-Entry Notes will not be issuable as Certificated Notes,
except under the circumstances described herein.
The interest rate on, or interest rate formula for, each Note will be
established by the Company at the date of issue of such Note and will be set
forth therein and specified in the applicable Pricing Supplement. Interest rates
and interest rate formulas are subject to change by the Company, but no change
will affect any Notes already issued or as to which an offer to purchase has
been accepted by the Company. Unless otherwise specified in the applicable
Pricing Supplement, the Notes will bear interest at a fixed rate ("Fixed Rate
Notes") or at a floating rate ("Floating Rate Notes") determined by reference to
the CD Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the
Treasury Rate as adjusted by the Spread or Spread Multiplier, if any, applicable
to such Notes. See "Description of Notes -- Interest Rates".
The Interest Payment Dates for each Fixed Rate Note will be May 1 and
November 1 of each year and at maturity and for each Floating Rate Note will be
established by the Company on the date of issue and will be set forth therein
and in the applicable Pricing Supplement. See "Description of Notes -- Payment".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT, THE PROSPECTUS, OR ANY PRICING SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
====================================================================================================================================
PRICE TO AGENTS' DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2) COMPANY(2)(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Per Note.......................... 100% Not to exceed .600% Not less than 99.400%
- ----------------------------------
Total............................. $1,500,000,000 Not to exceed $9,000,000 Not less than $1,491,000,000
- ----------------------------------
====================================================================================================================================
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be issued at 100% of their principal amount.
(2) The Company will pay to Bear, Stearns & Co. Inc., CS First Boston
Corporation, Donaldson, Lufkin & Jenrette Securities Corporation, Lehman
Brothers, Lehman Brothers Inc. (including its affiliate Lehman Government
Securities Inc.), Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and
UBS Securities Inc., each as Agent (collectively, the "Agents"), a
commission, which may be in the form of a discount, not to exceed .600% of
the principal amount of any Note sold through such Agent, depending upon
such Note's maturity. In addition, the Company may sell Notes to Agents who
are acting as dealers, at a discount negotiated at the time of sale and
specified in the applicable Pricing Supplement, for resale to investors at
varying prices as determined by such Agent at the time of resale. See "Plan
of Distribution".
(3) Assuming Notes are issued at 100% of their principal amount and before
deducting other expenses payable by the Company estimated at $1,335,000,
including reimbursement of certain of the Agents' expenses.
---------------------
The Notes are being offered on a continuous basis for sale directly by the
Company in those jurisdictions where it is authorized to do so and through the
Agents, each of whom has agreed to use its best efforts to solicit purchases of
the Notes. The Notes may also be sold by the Company to any Agent, as principal,
at a discount, for resale to investors. The Company has reserved the right to
sell the Notes through one or more additional agents. The Notes will not be
listed on any securities exchange, and there can be no assurance that any or all
of the Notes offered hereby will be sold or that there will be a secondary
market for the Notes. The Company reserves the right to withdraw, cancel or
modify the offer made hereby without notice. The Company or its Agents may
reject any order in whole or in part.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH 22, 1995
<PAGE> 2
SUMMARY FINANCIAL INFORMATION
The following summary of certain financial information of the Company and
its consolidated subsidiaries has been derived principally from information
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, available as described under "Documents Incorporated by
Reference", and is qualified in its entirety by the detailed information and
financial statements set forth therein.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31
------------------------------------------------------------
1990 1991 1992 1993 1994
-------- -------- -------- -------- --------
(DOLLAR AMOUNTS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges.................... $2,246.7 $2,753.2 $2,931.9 $3,250.7 $3,866.7
Insurance premiums................. 212.7 202.5 209.9 242.2 293.5
Investment and other income........ 197.3 163.3 182.8 196.7 227.7
-------- -------- -------- -------- --------
2,656.7 3,119.0 3,324.6 3,689.6 4,387.9
Expenses --
Interest expense................... 1,146.3 1,278.5 1,222.8 1,291.8 1,509.7
Operating expenses................. 586.6 705.4 807.4 979.6 1,191.6
Provision for losses on finance
receivables..................... 302.0 423.7 504.0 468.9 569.9
Insurance benefits paid or
provided........................ 96.8 91.1 100.0 114.9 144.1
-------- -------- -------- -------- --------
2,131.7 2,498.7 2,634.2 2,855.2 3,415.3
-------- -------- -------- -------- --------
Earnings Before Provision for Income
Taxes and Cumulative Effect of
Changes in Accounting Principles... 525.0 620.3 690.4 834.4 972.6
Provision for Income Taxes........... 185.8 219.6 240.7 310.7 369.1
-------- -------- -------- -------- --------
Earnings Before Cumulative Effect of
Changes in Accounting Principles... 339.2 400.7 449.7 523.7 603.5
Cumulative Effect of Changes in
Accounting Principles(a)........... -- -- (10.0) -- --
-------- -------- -------- -------- --------
Net Earnings......................... $ 339.2 $ 400.7 $ 439.7 $ 523.7 $ 603.5
======= ======= ======= ======= =======
Ratio of Earnings to Fixed
Charges(b)......................... 1.46 1.48 1.56 1.64 1.64
==== ==== ==== ==== ====
</TABLE>
- ---------------
(a) The Company recorded a one-time cumulative effect of changes in accounting
principles related to the adoption, effective January 1, 1992, of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", and SFAS No. 109, "Accounting for Income Taxes".
(b) For purposes of computing the Ratio of Earnings to Fixed Charges, "Earnings"
represent earnings before provision for income taxes and cumulative effect
of changes in accounting principles, plus fixed charges. "Fixed Charges"
represent interest expense and a portion of rentals representative of an
implicit interest factor for such rentals.
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<PAGE> 3
SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
1993 1994
----------- -----------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents............................................ $ 261.6 $ 361.1
Investments in Marketable Securities(c)
Bonds and Notes................................................... 603.5 567.6
Stocks............................................................ 35.0 41.9
--------- ---------
Total Investments in Marketable Securities................... 638.5 609.5
Finance Receivables
Consumer Finance.................................................. 20,330.1 23,866.8
Commercial Finance................................................ 9,077.2 10,878.4
--------- ---------
Total Finance Receivables.................................... 29,407.3 34,745.2
Less -- Unearned finance income................................... 3,208.2 3,769.5
Allowance for losses on finance receivables............... 798.0 932.4
--------- ---------
25,401.1 30,043.3
Other Assets......................................................... 1,493.7 1,218.9
--------- ---------
Total Assets................................................. $27,794.9 $32,232.8
========= =========
Liabilities and Stockholders' Equity:
Notes Payable unsecured short-term
Commercial paper.................................................. $ 9,735.8 $11,640.5
Bank loans........................................................ 472.4 571.4
Long-Term Debt unsecured due within one year
Senior............................................................ 1,911.4 1,973.1
Subordinated...................................................... 100.0 --
Capital........................................................... 0.1 0.1
Accounts Payable and Accruals........................................ 840.2 726.0
Insurance Policy and Claims Reserves................................. 429.8 545.6
Long-Term Debt unsecured
Senior............................................................ 10,889.2 12,848.3
Subordinated...................................................... 141.2 141.2
Capital........................................................... 0.6 0.5
--------- ---------
Total Long-Term Debt......................................... 11,031.0 12,990.0
--------- ---------
Stockholders' Equity................................................. 3,274.2 3,786.1
--------- ---------
Total Liabilities and Stockholders' Equity................... $27,794.9 $32,232.8
========= =========
</TABLE>
- ---------------
(c) The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities"
effective March 31, 1994. Accordingly, at December 31, 1994, all
investments in marketable securities are carried at market value. At
December 31, 1993, investments in bonds and notes are carried at amortized
cost; market value on this date was $616.8 million.
S-3
<PAGE> 4
DESCRIPTION OF NOTES
The following description of the Notes offered hereby supplements and to
the extent inconsistent therewith replaces the description of the general terms
and provisions of the Debt Securities set forth in the Prospectus, to which
description reference is hereby made. The following description of the Notes
will apply to such Notes unless otherwise specified in the applicable Pricing
Supplement.
GENERAL
The Senior Notes will constitute a single series to be issued under an
indenture dated as of October 15, 1994 (the "Senior Indenture") between the
Company and Citibank, N.A. ("Citibank"), and the Subordinated Notes will
constitute a separate series to be issued under an indenture dated as of October
15, 1994 (the "Subordinated Indenture") between the Company and Citibank. The
Senior Indenture and the Subordinated Indenture are collectively referred to
herein as the "Indentures". Neither series is limited as to aggregate principal
amount. The Company has authorized the offering and sale pursuant to this
Prospectus Supplement of up to $1,500,000,000 combined aggregate initial public
offering price or purchase price of Senior Notes and Subordinated Notes, subject
to increase from time to time as may be authorized by the Company as an
extension of previous offerings of Notes. No Subordinated Notes have been issued
prior to the date of this Prospectus Supplement. For the purpose of determining
the amount issued, the principal amount of any Original Issue Discount Note
(defined below) means the price at which such Note is issued.
Notes may be issued as discounted securities (bearing no interest or
interest at a rate which at the time of issuance is below market rates), at a
price below their stated principal amount, which provide that upon redemption or
acceleration of the maturity thereof an amount less than the principal amount
thereof shall become due and payable, or which for United States Federal income
tax purposes would be considered original issue discount notes ("Original Issue
Discount Notes"). See "Taxation of Original Issue Discount Notes".
Reference is made to the applicable Pricing Supplement for the following
terms and other information with respect to a Note being offered thereby: (1)
the public offering price, if other than 100% of the principal amount; (2) the
rate per annum at which a Fixed Rate Note will bear interest, if applicable; (3)
the rates at which a Floating Rate Note will bear interest, if applicable,
determined by reference to an interest rate basis and a Spread or a Spread
Multiplier (each defined below), if any, and any limits on such interest rates;
(4) the maturity of such Note; (5) any provisions of such Note relating to
redemption, sinking fund or repayment prior to the date on which such Note will
mature; (6) if such Note is an Indexed Note (as defined below), the manner in
which the interest on, or the principal amount payable at stated maturity of,
such Note will be determined; (7) whether such Note will be issued initially as
a Book-Entry Note or a Certificated Note; (8) the name of any agent or dealer
involved in the offering or sale of such Note; and (9) any other terms of such
Note not inconsistent with the provisions of the Indenture.
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
below under "Book-Entry Notes", Book-Entry Notes will not be issuable in
certificated form. The authorized denominations of the Notes will be $100,000 or
any larger amount that is an integral multiple of $1,000.
The Senior Notes will constitute part of the Superior Indebtedness of the
Company and rank pari passu with all outstanding senior debt. See "Description
of Debt Securities -- Senior Securities" in the Prospectus.
The Subordinated Notes will be subordinate and junior in right of payment
to all Superior Indebtedness of the Company. See "Description of Debt
Securities -- Subordinated Securities" in the Prospectus. At December 31, 1994,
Superior Indebtedness aggregated approximately $27.4 billion.
"Business Day" means any day that is not a Saturday or Sunday and that, in
The City of New York (and, with respect to LIBOR Notes, the City of London), is
not a day on which banking institutions are generally authorized or obligated by
law to close. "London Business Day" means any day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
S-4
<PAGE> 5
PAYMENT
Each Note will bear interest from the date of issue at the rate per annum
stated, or calculated pursuant to the interest rate formula set forth, therein,
until the principal thereof is paid or made available for payment. Interest will
be payable on each Interest Payment Date, and principal and interest due at
maturity or, if applicable, upon redemption, will be payable upon presentation
of the Notes. Interest, if any, due other than at maturity or, if applicable,
upon redemption, will be payable by check or by wire transfer (except as
described below), at the option of the Company.
Interest on Fixed Rate Notes will be payable on May 1 and November 1 of
each year and upon maturity. Except as provided below, interest on Floating Rate
Notes will be payable, in the case of Notes with a daily, weekly or monthly
Interest Reset Date (as defined below), on the third Wednesday of each month or
on the third Wednesday of March, June, September and December, as specified in
the applicable Pricing Supplement; in the case of Notes with a quarterly
Interest Reset Date, on the third Wednesday of March, June, September and
December; in the case of Notes with a semi-annual Interest Reset Date, on the
third Wednesday of the two months specified in the applicable Pricing
Supplement; and in the case of Notes with an annual Interest Reset Date, on the
third Wednesday of the month specified in the applicable Pricing Supplement.
Each date on which interest is payable on a Note is referred to herein as an
"Interest Payment Date." Any payment required to be made in respect of a Note on
a date that is not a Business Day need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
such date, and no additional interest shall accrue for the period from and after
such date; provided, however, that in the case of an Interest Payment Date for a
LIBOR Note, if such next succeeding Business Day is in the next succeeding
calendar month, such Interest Payment Date shall be the immediately preceding
Business Day.
Interest payable on any Interest Payment Date will be payable to the person
in whose name such Note is registered at the close of business 15 calendar days
prior to such Interest Payment Date (the "Record Date") or, in the case of
Global Securities representing Book-Entry Notes, by wire transfer to The
Depository Trust Company, New York, New York (the "Depositary") or its nominee,
or such other depositary as is specified in the Pricing Supplement; provided,
however, that interest payable on the Interest Payment Date occurring at
maturity or earlier redemption, will be payable to the person to whom principal
shall be payable. Notwithstanding the foregoing, the first payment of interest
on any Note originally issued between a Record Date and an Interest Payment Date
or on an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Record Date to the registered owner on such next
Record Date.
Interest payments for Floating Rate Notes (except in the case of Floating
Rate Notes which reset daily or weekly) will include accrued interest from the
date of issue or from the last date in respect of which interest has been paid,
as the case may be, to, but excluding, the Interest Payment Date, or maturity
date, as the case may be. In the case of Floating Rate Notes which reset daily
or weekly, interest payments will include accrued interest from the date of
issue or from but excluding the last date in respect of which interest has been
paid, as the case may be, to, and including, the date which is 15 calendar days
immediately preceding such Interest Payment Date, except that at maturity or
earlier redemption, the interest payable will include interest accrued to, but
excluding, the maturity date or earlier redemption date. Accrued interest will
be calculated by multiplying the principal amount of a Note by an accrued
interest factor. This accrued interest factor will be computed by adding the
interest factors calculated for each day in the period for which accrued
interest is being calculated. The interest factor (expressed as a decimal
calculated to seven decimal places without rounding) for each such day will be
computed by dividing the interest rate applicable to such day by 360, in the
case of CD Rate Notes, Commercial Paper Rate Notes, Federal Funds Rate Notes and
LIBOR Notes (each defined below), or by the actual number of days in the year,
in the case of Treasury Rate Notes (defined below). The interest rate in effect
on each day will be (a) if such day is an Interest Reset Date, the interest rate
with respect to the Interest Determination Date (as defined below) pertaining to
such Interest Reset Date, or (b) if such day is not an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to the
next preceding Interest Reset Date, subject in either case to any maximum or
minimum interest rate limitation referred to below and to any adjustment by a
Spread or a Spread Multiplier referred to below; provided, however, that (i) the
interest rate in effect for the period from
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<PAGE> 6
the date of issue to the first Interest Reset Date with respect to a Floating
Rate Note will be the Initial Interest Rate specified in the applicable Pricing
Supplement; and (ii) the interest rate in effect for the ten calendar days
immediately prior to maturity will be that in effect on the tenth calendar day
preceding such maturity.
INTEREST RATES
Fixed Rate Notes will bear interest at a fixed rate or rates. Floating Rate
Notes will bear interest at rates determined by reference to the interest rate
basis specified in the applicable Pricing Supplement (i) plus or minus (as
specified in the applicable Pricing Supplement) the Spread, if any, or (ii)
multiplied by the Spread Multiplier, if any. The "Spread" is the number of basis
points specified in the applicable Pricing Supplement as being applicable to
such Note, and the "Spread Multiplier" is the percentage specified in the
applicable Pricing Supplement as being applicable to such Note. The "Index
Maturity" for any Floating Rate Note is the period until maturity of the
instrument or obligation from which the interest rate is calculated. Any
Floating Rate Note may also have either or both of the following: (i) a maximum
numerical interest rate limitation, or ceiling, on the rate of interest which
may accrue during any interest period; and (ii) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
interest period. The applicable Pricing Supplement will designate one of the
following interest rate bases as applicable to each Floating Rate Note: (a) the
CD Rate (a "CD Rate Note"), (b) the Commercial Paper Rate (a "Commercial Paper
Rate Note"), (c) the Federal Funds Rate (a "Federal Funds Rate Note"), (d) LIBOR
(a "LIBOR Note"), (e) the Treasury Rate (a "Treasury Rate Note"), or (f) such
other interest rate basis as is set forth in such Pricing Supplement.
Fixed Rate Notes will bear interest from the date of issue at the annual
interest rate or rates specified on the face thereof and in the applicable
Pricing Supplement. Interest on Fixed Rate Notes will be computed on the basis
of a 360-day year of twelve 30-day months.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Pricing Supplement. The Interest Reset
Date will be, in the case of Floating Rate Notes which reset daily, such
Business Day; in the case of Floating Rate Notes (other than Treasury Rate
Notes) which reset weekly, Wednesday of each week; in the case of Treasury Rate
Notes which reset weekly, Tuesday of each week; 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 the two months specified in the applicable
Pricing Supplement; and in the case of Floating Rate Notes which reset annually,
the third Wednesday of the month specified in the applicable Pricing Supplement.
If any Interest Reset Date for any Floating Rate Note would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to the
next day that is a Business Day, 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
CD Rate Notes, Commercial Paper Rate Notes and Federal Funds Rate Notes will be
the Monday next preceding such Interest Reset Date, unless such Monday is not a
Business Day, in which case the Interest Determination Date will be the first
Business Day next preceding such Monday. The Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR Note will be the second London
Business Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note 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 normally sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be held on
the preceding Friday. If, as the result of a legal holiday, an auction is so
held on the preceding Friday, such Friday will be the Interest Determination
Date pertaining to the Interest Reset Date occurring in the next succeeding
week.
The "Calculation Date," where applicable, pertaining to an Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date or if any such day is not a Business Day, the next
succeeding Business Day, or (ii) the Business Day preceding the applicable
Interest Payment
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<PAGE> 7
Date or Maturity Date (or date of redemption or repayment) as the case may be.
Unless otherwise specified in the applicable Pricing Supplement, Citibank shall
be the calculation agent (the "Calculation Agent") with respect to the Notes.
The appropriate Trustee will, upon the request of the holder of any
Floating Rate Note, provide the interest rate then in effect and, if different,
the interest rate which will become effective as a result of a determination
made with respect to the most recent Interest Determination Date with respect to
such Note. The Company will notify the appropriate Trustee of each determination
of the interest rate applicable to any such Notes promptly after such
determination is made.
The interest rate on the 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. In addition, the applicable Pricing Supplement will
define or particularize for each Floating Rate Note the following terms, if
applicable: Index Maturity, Initial Interest Rate, Interest Payment Dates and
Interest Reset Dates with respect to such Note.
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) specified
in the CD Rate Notes and in the applicable Pricing Supplement.
"CD Rate" means, with respect to any Interest Determination Date, the rate
on such date for negotiable certificates of deposit having the Index Maturity
designated in the applicable Pricing Supplement as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)" or, if not so published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the CD Rate
will be the rate on such Interest Determination Date for negotiable certificates
of deposit of the Index Maturity designated in the applicable Pricing Supplement
as published by the Federal Reserve Bank of New York in its daily statistical
release, "Composite 3:30 p.m. Quotations for the U.S. Government Securities"
("Composite Quotations") under the heading "Certificates of Deposit." If such
rate is not yet published by 3:00 p.m., New York City time, on the Calculation
Date pertaining to such Interest Determination Date, then the CD Rate on such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean (rounded to the nearest one-hundredth of a percent, with
five one-thousandths of a percent rounded upwards) of the secondary market
offered rates as of 10:00 a.m., New York City time, on such Interest
Determination Date, of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks of the highest credit standing (in the market for negotiable certificates
of deposit) with a remaining maturity closest to the Index Maturity designated
in the Pricing Supplement in a denomination of $5,000,000; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the CD Rate will be the CD Rate in effect
on such Interest Determination Date.
CD Rate Notes, like other Notes, are not deposit obligations of a bank and
are not insured by the Federal Deposit Insurance Corporation.
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) specified in the Commercial Paper Rate Notes and in the
applicable Pricing Supplement.
"Commercial Paper Rate" means with respect to any Interest Determination
Date, the Money Market Yield (as defined below) of the rate on that date for
commercial paper having the Index Maturity designated in the applicable Pricing
Supplement as published in H.15(519), under the heading "Commercial Paper." In
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<PAGE> 8
the event that such rate is not published by 9:00 a.m., New York City time, on
the Calculation Date pertaining to such Interest Determination Date, then the
Commercial Paper Rate shall be the Money Market Yield of the rate on that
Interest Determination Date for commercial paper having the Index Maturity
designated in the applicable Pricing Supplement as published in 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 Composite
Quotations, the Commercial Paper Rate for that Interest Determination Date shall
be calculated by the Calculation Agent and shall be the Money Market Yield of
the arithmetic mean (rounded to the nearest one-hundredth of a percent, with
five one-thousandths of a percent rounded upwards) of the offered rates of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent as of 11:00 a.m., New York City time, on that Interest
Determination Date, for commercial paper having the Index Maturity designated in
the applicable Pricing Supplement placed for an industrial issuer whose bond
rating is "AA", or the equivalent, from a nationally recognized rating agency;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
will be the Commercial Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded to
the nearest one-hundredth of a percent, with five one-thousandths of a percent
rounded upwards) calculated in accordance with the following formula:
<TABLE>
<C> <C> <S>
D X 360
Money Market Yield = -------------- X 100
360 - (D X M)
</TABLE>
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 interest period for which interest is being calculated.
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) specified in the Federal Funds Rate Notes and in the
applicable Pricing Supplement.
"Federal Funds Rate" means, with respect to any Interest Determination
Date, the rate on that day for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published by 9:00 a.m., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate will be the rate on such Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not yet published by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be the arithmetic mean
(rounded to the nearest one-hundredth of a percent, with five one-thousandths of
a percent rounded upwards) of the rates 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 as of 11:00 a.m., New
York City time, on such Interest Determination Date; provided, however, that if
the brokers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate will be the Federal Funds
Rate in effect on such Interest Determination Date.
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR and the Spread or Spread Multiplier, if any) specified in the
LIBOR Notes and in the applicable Pricing Supplement.
S-8
<PAGE> 9
"LIBOR" will be determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date, LIBOR will be
determined as follows: (A) if the method of calculation of LIBOR for a
LIBOR Note is specified on the face thereof to be "LIBOR-Reuters" or if no
method of calculation of LIBOR is specified, LIBOR for such Interest
Determination Date will be determined on the basis of the offered rates for
deposits in U.S. dollars having the Index Maturity designated in the
applicable Pricing Supplement, commencing on the second London Business Day
immediately following that Interest Determination Date, which appear on the
Reuters Screen LIBO Page as of 11:00 a.m., London time, on that Interest
Determination Date. If at least two such offered rates appear on the
Reuters Screen LIBO Page (as defined below), the rate in respect of that
Interest Determination Date will be the arithmetic mean (rounded upwards,
if necessary, to the nearest one-sixteenth of a percent) of such offered
rates as determined by the Calculation Agent, or (B) if the method of
calculation of LIBOR for a LIBOR Note is specified on the face thereof to
be "LIBOR-Telerate", LIBOR for such Interest Determination Date will be the
rate for deposits in U.S. dollars having the Index Maturity specified in
the applicable Pricing Supplement which appears on the Telerate Page 3750
or such other page as may replace Telerate Page 3750 on that service for
the purpose of displaying London interbank offered rates of major banks
(the "Telerate Page") as of 11:00 A.M., London time, on the Interest
Determination Date. If fewer than two offered rates appear, in the case of
alternative (A) above, or if such rate does not appear on the Telerate
Page, in the case of alternative (B) above, the rate for that Interest
Determination Date will be determined as if the parties had specified the
rate described in (ii) below. "Reuters Screen LIBO Page" means the display
designated as Page "LIBO" on the Reuters Monitor Money Rates Service (or
such other page as may replace the LIBO page on that service for the
purpose of displaying London interbank offered rates of major banks).
(ii) With respect to an Interest Determination Date on which fewer
than two offered rates appear on the Reuters Screen LIBO Page or if the
rate for deposits does not appear on the Telerate Page as applicable and as
specified in (i) above, LIBOR will be determined on the basis of the rates
at which deposits in U.S. dollars are offered by four major banks in the
London interbank market selected by the Calculation Agent at approximately
11:00 a.m., London time, on that Interest Determination Date to prime banks
in the London interbank market having the Index Maturity designated in the
Pricing Supplement commencing on the second London Business Day immediately
following that Interest Determination Date and in a principal amount equal
to an amount of not less than U.S. $1 million that is representative for a
single transaction in such market at such time. The Calculation Agent will
request the principal London Office of each of such banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR
in respect of that Interest Determination Date will be the arithmetic mean
(rounded upwards, if necessary, to the nearest one-sixteenth of a percent)
of such quotations. If fewer than two quotations are provided, LIBOR in
respect of that Interest Determination Date will be the arithmetic mean
(rounded upwards, if necessary, to the nearest one-sixteenth of a percent)
of the rates quoted by three major banks in The City of New York selected
by the Calculation Agent at approximately 11:00 a.m., New York City time,
on that Interest Determination Date for loans in U.S. dollars to leading
European banks, having the Index Maturity designated in the applicable
Pricing Supplement commencing on the second London Business Day immediately
following that Interest Determination Date and in a principal amount equal
to an amount of not less than U.S. $1 million that is representative for a
single transaction in such market at such time; provided, however, that if
the banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR will be LIBOR in effect on such Interest
Determination Date.
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), specified in the Treasury Rate Notes and in the applicable Pricing
Supplement.
"Treasury Rate" means, with respect to any Interest Determination Date, the
rate for the auction held on such Interest Determination Date of direct
obligations of the United States ("Treasury bills") having the Index Maturity
designated in the applicable Pricing Supplement as published in H.15(519) under
the heading
S-9
<PAGE> 10
"Treasury bills -- auction average (investment)" or, if not so published by 9:00
a.m., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the auction average rate (expressed as a bond equivalent,
rounded to the nearest one-hundredth of a percent, with five one-thousandths of
a percent rounded upwards, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the United
States Department of the Treasury. In the event that the results of the auction
of Treasury bills having the Index Maturity designated in the applicable Pricing
Supplement are not 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 on such
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards, 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 Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent for the
issue of Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate will be the Treasury Rate in
effect on such Interest Determination Date.
Indexed Notes
The Notes may be issued, from time to time, as Notes the principal amount
of which, payable at maturity, and/or the interest payable on each Interest
Payment Date will be determined by reference to currencies, currency units,
commodity prices, financial or non-financial indices or other factors (the
"Indexed Notes"), as indicated 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 fluctuation of the
relative value, rate or price of the specified index. Specific information
pertaining to the method for determining the principal amount payable at
maturity, a historical comparison of the relative value, rate or price of the
specified index and the face amount of the Indexed Note and certain additional
United States federal tax considerations will be described in the applicable
Pricing Supplement.
REDEMPTION
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to any sinking fund, and will not be redeemable at the
option of the Company or repayable at the option of the Holder prior to
maturity.
BOOK-ENTRY NOTES
The Notes may be issued in whole or in part in the form of one or more
Global Securities registered in the name of a nominee of the Depositary. Upon
issuance, all Book-Entry Notes having the same Issue Date, Maturity Date, rank
(Senior or Subordinated), redemption provisions, repayment provisions, Interest
Payment Period and Dates and, in the case of Fixed Rate Notes, the interest
rate, or, in the case of Floating Rate Notes, Base Rate, Initial Interest Rate,
Index Maturity, Interest Reset Period and Dates, Spread or Spread Multiplier, if
any, Minimum Interest Rate, if any, and Maximum Interest Rate, if any, will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, the Depositary or such
other depositary as is specified in the Pricing Supplement and registered in the
name of the Depositary or such other depositary (or its nominee). Book-Entry
Notes will not be exchangeable for Certificated Notes and, except under the
circumstances described below, will not otherwise be issuable as Certificated
Notes. Unless and until it is exchanged in whole or in part for the individual
Notes represented thereby, a Global Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of the Depositary or a nominee of
such successor.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit the accounts of persons held with it with
the respective principal amounts of the Notes represented by such
S-10
<PAGE> 11
Global Security. Such accounts shall be designated by the Agents with respect to
such Notes or by the Company if such Notes are offered and sold directly by the
Company. Ownership of beneficial interests in a Global Security will be limited
to persons that have accounts with the Depositary or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in such Global Security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depositary or its nominee (with respect to interests of participants) for
such Global Security and on the records of participants (with respect to
interests of persons other than participants). The laws of some states require
that certain purchasers of securities take physical delivery of such securities.
Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary, or its nominee, is the registered owner of such
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner or Holder of the Notes represented by such Global
Security for all purposes under the Indenture. Except as provided below, owners
of beneficial interests in a Global Security will not be entitled to have any of
the individual Notes represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Notes and
will not be considered the owners or Holders thereof under the Indenture.
Principal, premium, if any, and interest payments on Notes registered in
the name of the Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Notes. Neither the Company, the appropriate Trustee, any
Paying Agent nor the Securities Registrar for such Notes will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security for such Notes or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that the Depositary for any Notes or its nominee, upon
receipt of any payment of principal, premium or interest, will credit
immediately participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of the Global
Security for such Notes as shown on the records of the Depositary or its
nominee. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities registered in "street name", and will be the responsibility of
such participants.
If the Depositary for any Notes is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Notes in exchange for
the Global Security representing such Notes. In addition, the Company may at any
time and in its sole discretion determine not to have the Notes represented by
Global Securities and, in such event, will issue individual Notes in exchange
for all the Global Securities representing such Notes. Further, an owner of a
beneficial interest in a Global Security may, on terms acceptable to the Company
and the Depositary, receive individual Notes. (The Depositary has advised the
Company that it does not intend to accept any such terms.) In any such instance,
an owner of a beneficial interest in a Global Security will be entitled to
physical delivery of individual Notes with the same terms as such represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Notes registered in its name. Individual Notes so issued will be
issued in denominations of $100,000 and any larger amount that is an integral
multiple of $1,000.
The Depositary has advised the Company and the Agents as follows: 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 pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. The Depositary was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks,
S-11
<PAGE> 12
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
CONCERNING THE TRUSTEE
Citibank serves as trustee with respect to two other series of Debt
Securities previously issued under the Senior Indenture. Citibank acts as
depository for funds of, extends credit to, and performs other banking services
for, the Company in the normal course of business.
TAXATION OF ORIGINAL ISSUE DISCOUNT NOTES
The following summary is a general discussion of the tax consequences
resulting from ownership of Original Issue Discount Notes. It does not discuss
all tax consequences that may be relevant to a particular Holder in light of his
circumstances.
An Original Issue Discount Note possesses original issue discount ("OID")
to the extent its "stated redemption price at maturity" exceeds its "issue
price," which is, generally, the original purchase price paid to the Company.
For this purpose, the stated redemption price of a Note at maturity equals the
total of all payments provided for under the Note other than "qualified stated
interest." "Qualified stated interest" is taxable as paid or accrued to or by a
Holder in accordance with such Holder's method of accounting. As described
below, except with respect to Notes bearing de minimus amounts of OID, OID is
treated as accruing on a constant yield basis throughout the term of a Note and
is taxed currently, regardless of when paid.
Pursuant to Treasury regulations (the "Regulations"), "qualified stated
interest" includes interest payable at a fixed rate. In the case of a "variable
rate debt instrument", such qualified stated interest is specially computed. A
variable rate debt instrument is one that meets certain criteria and that
provides for interest at (i) one or more qualified floating rates (described
below), (ii) a single fixed rate and one or more qualified floating rates, (iii)
a single objective rate (described below), or (iv) a single fixed rate and a
single objective rate that is a qualified inverse floating rate. A "qualified
floating rate" includes a floating rate, variations of which can be expected to
measure contemporaneous variations in the cost of newly borrowed funds, but does
not generally include a multiple of a qualified floating rate. An "objective
rate" includes a rate based on the price of actively traded property or on an
index of the prices of such property, and, in addition, includes a rate that is
based on a qualified floating rate but that is not itself a qualified floating
rate (for instance, a multiple of a qualified floating rate). Restrictions on
the maximum or minimum stated interest rate will not generally result in a rate
failing to be a qualified floating rate or an objective rate, as the case may
be, but may do so under certain circumstances. If interest on such an instrument
is payable at a single qualified floating rate or a single objective rate, then
all such interest payments are payments of qualified stated interest. The
Company believes that current payments of interest on Floating Rate Notes for
which the applicable Pricing Supplement specifies an interest rate contained in
clause (a), (b), (c), (d) or (e) of page S-6 under "Description of
Notes -- Interest Rates" constitute payments of qualified stated interest
pursuant to the Regulations. Such Notes may nevertheless have OID to the extent
that the stated redemption price thereof at maturity exceeds the issue price
thereof.
The OID to be reported as taxable income each year with respect to Fixed
Rate Notes is determined in the following manner under Section 1272 of the
Internal Revenue Code of 1986, as amended (the "Code"). The amount of OID
attributable to each "accrual period" (a period that may be of any length not
longer than one year and that may vary during the term of the Note, provided
that each scheduled payment of principal or interest occurs at the end of an
accrual period) is computed by multiplying the "adjusted issue price" of the
Note at the beginning of the accrual period by the yield of such Note and
subtracting the amount of any qualified stated interest allocable to the accrual
period. The yield is determined on the basis of compounding at the close of each
accrual period and properly adjusted for the length of the accrual period. The
"adjusted issue price" of the Note at the beginning of any accrual period is the
Note's issue price increased by the amount of OID attributable to all prior
accrual periods and decreased by the amount of any payments previously made on
the Note other than payments of qualified stated interest. For purposes of
computing the amount of OID to be included in the taxable income of a Holder for
a taxable year, the total amount of OID computed for each
S-12
<PAGE> 13
accrual period is allocated ratably on a daily basis over the accrual period.
The daily portions attributable to the period of time the Note is owned by the
Holder during the tax year are includible in the Holder's gross income for the
year. Similarly, the OID to be reported as taxable income each year with respect
to Floating Rate Notes is allocated to an accrual period under Code Section 1272
according to the constant yield method described above with respect to Fixed
Rate Notes, except that the allocation of OID to an accrual period must be made
by assuming that the Note provides for qualified stated interest payments at the
end of each accrual period based on a reasonable fixed rate.
Floating Rate Notes that do not constitute variable rate debt instruments
under the Regulations will be subject to special tax treatment. Certain payments
of interest on such Notes may constitute "contingent" payments and be treated as
interest taxable to the Holder in the year in which such payment becomes fixed,
while other payments may be treated as payments pursuant to one or more options
or property rights, and be taxable according to their substance. If any Notes
specify an interest rate under clause (f) of page S-6 under "Description of
Notes -- Interest Rates", the federal income tax consequences to Holders will be
described in the applicable Pricing Supplement.
The above rules do not apply to Notes with a maturity of one year or less
("Short Term Notes"). If the Holder of a Short Term Note is a cash basis
taxpayer and if the Short Term Note is not subject to Code Section 1281 (which
requires current inclusion in income of "acquisition discount" on certain
short-term obligations), there will be no OID, and the Holder will have taxable
interest income in the year in which the Short Term Note matures. If the Short
Term Note is an obligation to which Code Section 1281 applies (as described
below), the Holder must accrue the OID attributable to such Short Term Note. For
a Short Term Note, the OID is equal to the excess of the total amount payable at
maturity over the Holder's tax basis for such Note. Current inclusion in income
is required of an amount equal to the daily portions of the OID for each day
during the taxable year during which the Note is held. Such daily portion is to
be determined on the basis of ratable accrual of the OID or on a constant
interest basis compounded daily. A Holder of a Short Term Note subject to Code
Section 1281 can, with respect to nongovernment obligations, elect to accrue
acquisition discount instead of OID, under the rules of Code Section 1281.
A Short Term Note will be subject to the provisions of Code Section 1281 if
the Note is (1) held by a taxpayer using an accrual method of accounting, (2)
held primarily for sale to customers in the ordinary course of a taxpayer's
trade or business, (3) held by a bank (as defined in Code Section 581), (4) held
by a regulated investment company or a common trust fund, (5) identified by a
taxpayer under Code Section 1256(e)(2) as being part of a hedging transaction,
or (6) a stripped bond or stripped coupon held by the person who stripped the
bond or coupon (or by any other person whose basis is determined by reference to
the basis in the hands of such person). In addition, there are special rules
which apply to "pass-through entities" such as a partnership, S corporation, or
trust.
The tax basis of any Note in the hands of a Holder will be increased by
amounts of OID included in the income of the Holder under Code Sections 1272 or
1281 and decreased by the amount of any payment to a Holder other than a payment
of qualified stated interest.
Holders are urged to consult own tax advisors with regard to whether the
Notes will be considered to have been issued with original discount and the
effect of original issue discount treatment on their particular situations.
S-13
<PAGE> 14
PLAN OF DISTRIBUTION
The Notes are being offered on a continuous basis by the Company through
the Agents, each of whom has agreed to use its best efforts to solicit purchases
of the Notes. The Notes may also be sold by the Company to any Agent, as
principal, at a discount for resale to investors at varying prices related to
prevailing market prices at the time of resale, as determined by such Agent. The
Company has reserved the right to sell the Notes through one or more additional
agents. Any such additional agent will be identified in any Pricing Supplement
relating to any Notes sold by any such additional agent. The Notes may also be
sold by the Company directly on its own behalf in those jurisdictions where it
is authorized to do so. The Company will pay each Agent a commission not to
exceed .600% of the principal amount of any Note sold through such Agent,
depending upon such Note's maturity. No commission will be payable to any Agent
on the Notes sold directly to purchasers by the Company. The Company has agreed
to reimburse the Agents for certain expenses.
Unless otherwise specified in the applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds.
The Company reserves the right to withdraw, cancel or modify the offer
without notice and may reject orders in whole or in part whether placed directly
with the Company or through any Agent. Each Agent will have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes in
whole or in part.
The Agents may from time to time purchase and sell Notes in the secondary
market, but are not obligated to do so. The Agents may make markets in the Notes
as permitted by applicable law and regulations, but are not obligated to do so
and may discontinue any market making at any time without notice. There can be
no assurance that there will be a secondary market for the Notes.
Each Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933 (the "Act"). The Company has agreed to indemnify each
Agent against certain liabilities, including liabilities under the Act, or
contribute to payments such Agent may be required to make in respect thereof.
LEGAL OPINIONS
The legality of the Notes will be passed upon for the Company by its
Assistant General Counsel, Timothy M. Hayes, 250 Carpenter Freeway, Irving, TX
75062-2729, and for the Agents by LeBoeuf, Lamb, Greene & MacRae, L.L.P., a
limited liability partnership including professional corporations, 125 West 55th
Street, New York, New York 10019.
S-14
<PAGE> 15
================================================================================
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS AND ANY PRICING SUPPLEMENT IN CONNECTION
WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS AND SUCH
PRICING SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY
AGENT. THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS AND ANY PRICING SUPPLEMENT
SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES OFFERED BY THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS AND SUCH PRICING SUPPLEMENT OR AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Summary Financial Information........ S-2
Description of Notes................. S-4
Taxation of Original Issue Discount
Notes.............................. S-12
Plan of Distribution................. S-14
Legal Opinions....................... S-14
PROSPECTUS
Available Information................ 2
Documents Incorporated
By Reference....................... 2
The Company.......................... 3
Application of Proceeds.............. 3
Description of Debt Securities....... 4
Description of Warrants.............. 8
Plan of Distribution................. 9
Legal Opinions....................... 10
Experts.............................. 10
</TABLE>
$1,500,000,000
[ASSOCIATES CORPORATION
OF NORTH AMERICA LOGO]
MEDIUM TERM
SENIOR NOTES, SERIES H
AND
MEDIUM TERM
SUBORDINATED NOTES, SERIES A
PROSPECTUS SUPPLEMENT
DATED
MARCH 22, 1995
================================================================================
