<PAGE> 1
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED DECEMBER 4, 1995)
$400,000,000
[ASSOCIATES CORP. OF NORTH AMERICA LOGO]
6 1/2% SENIOR NOTES DUE SEPTEMBER 9, 1998
------------------
Interest on the Notes is payable semi-annually on March 9 and September 9,
commencing March 9, 1997. The Notes are not redeemable prior to maturity.
------------------
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 OR
THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note................................. 99.954% .1% 99.854%
- -----------------------------------------------------------------------------------------------
Total.................................... $399,816,000 $400,000 $399,416,000
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from September 9, 1996 to date of delivery.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated to be $387,000.
------------------
The Notes are offered by the Underwriters, subject to prior sale, when, as
and if delivered to and accepted by them, subject to approval of certain legal
matters by counsel for the Underwriters. The Underwriters reserve the right to
reject orders in whole or in part. It is expected that delivery of the Notes
will be made in New York, New York on or about September 9, 1996 against payment
therefor in immediately available funds.
------------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
PAINEWEBBER INCORPORATED
------------------
The date of this Prospectus Supplement is September 4, 1996.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
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, 1995 and its Quarterly Report on Form 10-Q for the six months ended
June 30, 1996, 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 SIX MONTHS
FOR THE YEAR ENDED DECEMBER 31 ENDED JUNE 30
-------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- -------- --------
(DOLLAR AMOUNTS IN MILLIONS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges............ $2,753.2 $2,931.9 $3,250.7 $3,866.7 $4,805.3 $2,302.8 $2,662.5
Insurance premiums......... 202.5 209.9 242.2 293.5 325.1 165.0 169.8
Investment and other
income................... 163.3 182.8 196.7 227.7 254.0 124.0 134.2
-------- -------- -------- -------- -------- -------- --------
3,119.0 3,324.6 3,689.6 4,387.9 5,384.4 2,591.8 2,966.5
Expenses --
Interest expense........... 1,278.5 1,222.8 1,291.8 1,509.7 1,979.8 953.2 1,046.0
Operating expenses......... 705.4 807.4 979.6 1,191.6 1,417.8 690.2 742.4
Provision for losses on
finance receivables..... 423.7 504.0 468.9 569.9 729.7 347.9 477.0
Insurance benefits paid or
provided................ 91.1 100.0 114.9 144.1 135.7 66.0 68.0
-------- -------- -------- -------- -------- -------- --------
2,498.7 2,634.2 2,855.2 3,415.3 4,263.0 2,057.3 2,333.4
-------- -------- -------- -------- -------- -------- --------
Earnings Before Provision for
Income Taxes and Cumulative
Effect of Changes in
Accounting Principles...... 620.3 690.4 834.4 972.6 1,121.4 534.5 633.1
Provision for Income Taxes... 219.6 240.7 310.7 369.1 413.3 195.8 233.8
-------- -------- -------- -------- -------- -------- --------
Earnings Before Cumulative
Effect of Changes in
Accounting Principles...... 400.7 449.7 523.7 603.5 708.1 338.7 399.3
Cumulative Effect of Changes
in Accounting
Principles(a).............. -- (10.0) -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Earnings................. $ 400.7 $ 439.7 $ 523.7 $ 603.5 $ 708.1 $ 338.7 $ 399.3
======= ======= ======= ======= ======= ======= =======
Ratio of Earnings to Fixed
Charges(b)................. 1.48 1.56 1.64 1.64 1.56 1.56 1.60
==== ==== ==== ==== ==== ==== ====
</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.
S-2
<PAGE> 3
SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
1995 1996
----------- ---------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents........................................... $ 309.2 $ 273.6
Investments in Debt and Equity Securities
Bonds and Notes.................................................. 872.1 946.0
Stocks........................................................... 12.6 12.0
--------- ---------
Total Investments in Debt and Equity Securities............. 884.7 958.0
Finance Receivables, net of unearned finance income
Consumer Finance................................................. 24,609.2 26,997.4
Commercial Finance............................................... 11,759.1 12,454.3
--------- ---------
Total Net Finance Receivables............................... 36,368.3 39,451.7
Allowance for Losses on Finance Receivables......................... (1,109.2) (1,299.9)
Insurance Policy and Claims Reserves................................ (602.8) (634.9)
Other Assets........................................................ 1,173.5 1,437.6
--------- ---------
Total Assets................................................ $37,023.7 $40,186.1
========= =========
Liabilities and Stockholders' Equity:
Notes Payable, unsecured short-term
Commercial paper................................................. $12,732.7 $15,898.3
Bank loans....................................................... 702.0 --
Long-Term Debt, unsecured due within one year
Senior........................................................... 2,611.3 2,851.6
Subordinated..................................................... -- --
Capital.......................................................... 0.1 0.1
Accounts Payable and Accruals....................................... 833.5 730.9
Long-Term Debt, unsecured
Senior........................................................... 15,558.4 15,755.2
Subordinated..................................................... 141.2 125.0
Capital.......................................................... 0.5 0.4
--------- ---------
Total Long-Term Debt........................................ 15,700.1 15,880.6
Stockholders' Equity................................................ 4,444.0 4,824.6
--------- ---------
Total Liabilities and Stockholders' Equity.................. $37,023.7 $40,186.1
========= =========
</TABLE>
S-3
<PAGE> 4
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and provisions of the
Debt Securities set forth in the Prospectus, to which description reference is
hereby made.
GENERAL
The Notes will constitute senior debt of the Company, will be issued under
an indenture dated as of November 1, 1995 (the "Indenture") between the Company
and The Chase Manhattan Bank, as Trustee ("Chase"), will be limited to
$400,000,000 aggregate principal amount and will mature on September 9, 1998.
The Notes will bear interest at the rate per annum shown on the cover page of
this Prospectus Supplement from September 9, 1996 or from the most recent
Interest Payment Date to which interest has been paid or provided for, payable
semiannually on March 9 and September 9 of each year, commencing on March 9,
1997, to the persons in whose names the Notes are registered at the close of
business on the February 22 and the August 25, as the case may be, next
preceding such Interest Payment Date. Payment of interest will be made by check
mailed to the persons entitled thereto; provided, however, that such payment of
interest will be made by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by Chase at
its Corporate Trust Office not later than five business days prior to the record
date for the applicable Interest Payment Date. Payment of principal at maturity
will be made in immediately available funds upon surrender of a Note.
The Notes may be presented for payment or for transfer or exchange at the
Corporate Trust Office of Chase, presently located at 450 West 33rd Street, 15th
Floor, New York, New York 10001 or, at the option of the holder, at Chase's
corporate trust facility in the Borough of Manhattan, The City of New York,
presently located at Chase Institutional Trust Window, 1 Chase Manhattan Plaza,
1B, New York, New York 10081, or at any other office or agency maintained by the
Company for such purpose. The Company may from time to time vary the location of
any such offices but will at all times maintain an office or agency in the
Borough of Manhattan for presentation for payment or for transfer or exchange.
Wire transfer instructions shall be provided to Chase at either of the
aforementioned offices.
The Notes are to be issued only in registered form without coupons in
denominations of $1,000 and any multiple of $1,000.
REDEMPTION
The Notes are not redeemable prior to maturity.
CONCERNING THE TRUSTEE
Chase serves as trustee with respect to nine other series of Debt
Securities previously issued under the Indenture. In addition, Chase acts as
trustee with respect to various debt securities issued under indentures
originally executed by Manufacturers Hanover Trust Company and Chemical Bank,
respectively. Chase acts as depository for funds of, extends credit to, and
performs other banking services for, the Company in the normal course of
business.
S-4
<PAGE> 5
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the Underwriters named
below, and each of the Underwriters has severally agreed to purchase, the
principal amount of the Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................ $340,000,000
Donaldson, Lufkin & Jenrette Securities Corporation.................. 25,000,000
Prudential Securities Incorporated................................... 25,000,000
PaineWebber Incorporated............................................. 10,000,000
-------------
Total................................................... $400,000,000
=============
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the Notes if any are
purchased.
The Company has been advised by the Underwriters that they propose
initially to offer the Notes to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers at
such price less a concession not in excess of .1% of the principal amount of the
Notes. The Underwriters may allow and such dealers may reallow a discount not in
excess of .075% of the principal amount of the Notes to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
The Company has been advised by the Underwriters that they intend to make a
market in the Notes, but are not obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to payments the
Underwriters 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 Underwriters by LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
a limited liability partnership including professional corporations, 125 West
55th Street, New York, New York 10019. Mr. Hayes owns shares of Class A Common
Stock of the Company's parent, Associates First Capital Corporation, and has
options to purchase additional shares of such Class A Common Stock.
S-5
<PAGE> 6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C>
Summary Financial Information........... S-2
Description of the Notes................ S-4
Underwriting............................ S-5
Legal Opinions.......................... S-5
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>
$400,000,000
[ASSOCIATES CORP. OF NORTH AMERICA LOGO]
6 1/2% SENIOR NOTES DUE
SEPTEMBER 9, 1998
-------------------------
PROSPECTUS SUPPLEMENT
-------------------------
MERRILL LYNCH & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
PAINEWEBBER INCORPORATED
SEPTEMBER 4, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
