Pricing Supplement No. 103 Dated January 9, 1996,
to Prospectus Dated November 9, 1994
as Supplemented by Prospectus Supplement Dated
March 22, 1995
ASSOCIATES CORPORATION OF NORTH AMERICA
MEDIUM TERM SENIOR NOTES, SERIES H
$20,000,000 principal amount of the Series H Notes, bearing interest at 5.55%
per annum and maturing on January 12, 1999, are offered by the Company through
Sanwa International plc, which, as agent for the Company, has agreed to use
its best efforts to solicit purchasers of the Notes.
The Notes to which this Pricing Supplement relates will be Fixed Rate Notes
and will be initially issued as Book Entry Notes for settlement on January 12,
1996.
Prior to this Pricing Supplement, $873,745,000 aggregate principal amount of
the Series H Notes offered pursuant to the Prospectus Supplement dated March
22, 1995 to the Prospectus dated November 9, 1994 has been sold at the
interest rates then in effect. On November 16, 1995 the Company reduced the
amount of the aggregate principal amount of the Series H Notes available for
sale under the Prospectus and the Prospectus Supplement referred to above by
$100,000,000 from $1,500,000,000 to $1,400,000,000.
Recent Financial Information
The following summary of certain consolidated financial information of the
Company has been derived principally from information and financial statements
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 and its Quarterly Report on Form 10-Q for the
nine months ended September 30, 1995 (in millions):
<TABLE>
<CAPTION>
Year Ended or Nine Months Ended
at December 31 or at September 30
1994 1994 1995
(Unaudited)
<S> <C> <C> <C>
Revenue $ 4,387.9 $ 3,176.6 $ 3,973.3
Earnings Before Provision for
Income Taxes $ 972.6 $ 712.7 $ 833.2
Net Earnings $ 603.5 $ 444.3 $ 526.9
Finance Receivables (net of
unearned finance income and
allowance for losses) $30,043.3 $28,743.9 $34,004.8
Stockholders' Equity $ 3,786.1 $ 3,703.0 $ 4,334.3
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Recent Developments
On October 12, 1995, Ford Motor Company ("Ford"), the ultimate parent of the
Company, announced that it is reviewing its own possible strategic
actions, which could include a partial sale of the Company's immediate parent
corporation, Associates First Capital Corporation. Ford has stated that
whether any transaction would occur, and the possible timing of any such
transaction, have not been determined.
UNITED STATES TAXATION
The discussion set forth below is based upon currently
existing provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), existing regulations thereunder ("Treasury
Regulations") and current administrative rulings and court
decisions, all of which may be repealed, revoked or modified so
as to make the ensuing analysis inapplicable. The following
discussion addresses certain of the United States federal income
and estate tax consequences applicable to United States Aliens
(as defined below) who own Notes. Persons considering the
purchase, ownership or disposition of the Notes should consult
their own tax advisers concerning the United States federal tax
consequences in light of their particular situations as well as
any consequences arising under the laws of any other taxing
jurisdiction.
General
Under United States Federal income and estate tax law on the
date of this Pricing Supplement and subject to the discussion
below:
1. payments made by the Company or any Paying Agent on the
Notes to any United States Alien (as defined below) will not
be subject to United States federal withholding tax,
provided that in the case of interest, (a) the holder does
not actually or constructively (within the meaning of
Section 871(h)(3) of the Code) own 10% or more of the total
combined voting power of all classes of stock entitled to
vote of the Company, (b) the holder is not a controlled
foreign corporation that is a related person (as defined in
Section 864(d)(4) of the Code) with respect to the Company
through stock ownership and (c) either (1) the beneficial
owner of the Note certifies to the Paying Agent making the
payments to the holder (the "Relevant Paying Agent"), under
penalties of perjury, on U.S. Internal Revenue Service Form
W-8 (or a substantially similar substitute) in the year in
which a payment occurs (or in either of the two preceding
calendar years) that it is not a United States Person (as
defined below) and provides its name and address or (2) a
securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution")
and which holds the Note on behalf of the beneficial owner
certifies to the Relevant Paying Agent, under penalties of
perjury, that such a certification from the beneficial owner
has been received by it or by a financial institution
between it and the beneficial owner and furnishes the payor
with a copy of the Form W-8 or substantially similar
substitute in the manner required;
2. a United States Alien holder will not be subject to United
States federal income or withholding tax on gain realized on
the sale, exchange or retirement of the Notes provided that
(A) there does not exist any present or former connection
between such holder (or between a fiduciary, settlor,
beneficiary of, or a person holding a power over such holder
if such holder is an estate or trust, or member or
shareholder of, such holder, if such holder is a partnership
or corporation) and the United States, including, without
limitation, such holder (or such fiduciary, settlor,
beneficiary, person holding a power over, member or
shareholder) being or having been a citizen or resident or
treated as a resident thereof or being or having been
engaged in trade or business or present therein, or having
or having had a permanent establishment therein or (B) such
holder is not a bank receiving interest described in Section
881(c)(3)(A) of the Code or (C) such holder is not or will
not be a domestic or foreign personal holding company or
controlled foreign corporation or passive foreign investment
company or private foundation or tax exempt organization,
with respect to the United States of America or a
corporation which accumulates earnings to avoid United
States federal income tax; and
3. Notes held by an individual who at the time of death is not
a citizen or resident of the United States will not be
subject to United States federal estate tax as a result of
such individual's death provided that the individual does
not actually or constructively own 10% or more of the total
combined voting power of all classes of stock entitled to
vote of the Company and, at the time of such holder's death,
payments of interest on such Note would not have been
effectively connected with the conduct by such holder of
trade or business in the United States.
If a United States Alien is engaged in a trade or business
in the United States and interest and gain on the Notes are
effectively connected with the conduct of such trade or business,
the United States Alien, although exempt from the withholding tax
discussed in the preceding paragraph, may be subject to United
States federal income tax on such interest and gain in the same
manner as if it were a United States Person. In lieu of a Form
W-8 or similar form described above, such a United States Alien
would be required to provide the Company or its Paying Agent with
a properly executed Form 4224 to claim an exemption from
withholding tax. In addition, if such a holder is a foreign
corporation, it may be subject to a branch profits tax equal to
30% of its effectively connected earnings and profits for the
taxable year, subject to adjustments.
For the purposes of this discussion, "United States Person"
means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the
laws of the United States or an estate or trust the income of
which is subject to United States federal income taxation
regardless of its source. For purposes of this discussion, the
term "United States Alien" means any person that is, as to the
United States, a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or
trust or a foreign partnership one or more of the members of
which is, as to the United States, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.
Backup Withholding and Information Reporting
Under current United States Treasury Regulations,
information reporting and 31% backup withholding will not apply
to payments made by the Company or a Paying Agent on the Notes,
if the certification described in paragraph (1)(c) above is
received, provided that the Company or a Paying Agent does not
have actual knowledge that the payee is a United States Person.
Under current Regulations, payment of the proceeds of the
sale of the Notes through a foreign office of a foreign broker
will not be subject to a backup withholding. However, if such
broker is a United States Person, a controlled foreign
corporation for United States federal tax purposes, or a foreign
person 50% or more of whose gross income is from a United States
trade or business for a specified three-year period, information
reporting may apply unless such broker has in its records
documentary evidence that the beneficial owner is a United States
Alien and certain conditions are met or the beneficial owner
otherwise establishes an exemption. Payments of the proceeds of
a sale to or through the United States office of a broker will be
subject to information reporting and backup withholding unless
the holder or beneficial owner certifies to its non-United States
status under penalties of perjury or otherwise establishes an
exemption.
The foregoing is a general discussion of the information
reporting and backup withholding rules and may not be applicable
to the position of any particular holder or beneficial owner of
the Notes. In addition, the circumstances under which backup
withholding and information reporting will be required are
currently under review by the United States Treasury Department
and, thus, the rules discussed above may change with respect of
payments on the Notes or proceeds from the sale or exchange of
the Notes.
The Notes do not provide for any gross-up of payments by the
Company for or on account of any present or future tax,
assessment or other governmental charge imposed upon a holder by
the United States (or any political subdivision or taxing
authority thereof or therein).
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