<PAGE> 1
PROSPECTUS SUPPLEMENT
(To Prospectus dated December 4, 1995)
$300,000,000
<TABLE>
<S> <C>
[ASSOCIATES LOGO] ASSOCIATES CORPORATION OF NORTH AMERICA
</TABLE>
6 7/8% SUBORDINATED DEBENTURES DUE NOVEMBER 15, 2008
Interest on the Debentures is payable semiannually on May 15 and November 15 of
each year, beginning May 15, 1997. The Debentures 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. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Debenture.......................... 99.877% .500% 99.377%
Total.................................. $299,631,000 $1,500,000 $298,131,000
</TABLE>
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from November 8, 1996 to date of delivery.
(2) Before deducting expenses payable by the Company estimated to be $290,000.
The Debentures are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Debentures will be made at the office of
Salomon Brothers Inc, Seven World Trade Center, New York, New York, or through
the facilities of The Depository Trust Company, on or about November 8, 1996,
against payment in immediately available funds.
SALOMON BROTHERS INC ABN AMRO SECURITIES (USA) INC.
The date of this Prospectus Supplement is November 5, 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 DEBENTURES
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>
---------------------
On October 15, 1996, the Company announced unaudited results for the nine
months ended September 30, 1996. Such results, compared to the unaudited results
of operations for the similar period of the prior fiscal year, were as follows:
Revenue -- $4.6 billion (1996), $4.0 billion (1995); Earnings Before Provision
for Income Taxes -- $959.5 million (1996), $833.2 million (1995); and Net
Earnings -- $606.4 million (1996), $526.9 million (1995).
S-3
<PAGE> 4
DESCRIPTION OF THE DEBENTURES
The following description of the particular terms of the Debentures 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 Debentures will constitute subordinated 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 $300,000,000 aggregate principal amount and will mature on November 15, 2008.
The Debentures will bear interest at the rate per annum shown on the cover page
of this Prospectus Supplement from November 8, 1996 or from the most recent
Interest Payment Date to which interest has been paid or provided for, payable
semiannually on May 15 and November 15 of each year, commencing on May 15, 1997,
to the persons in whose names the Debentures are registered at the close of
business on the April 30 and the October 31, 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 Debenture.
The Debentures 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 Debentures are to be issued only in registered form without coupons in
denominations of $1,000 and any multiple of $1,000.
REDEMPTION
The Debentures are not redeemable prior to maturity.
SUBORDINATION
The Debentures 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.
CONCERNING THE TRUSTEE
Chase serves as trustee with respect to one other series of Subordinated
Securities previously authorized under the Indenture. In addition, Chase acts as
trustee with respect to various series of senior debt securities of the Company
issued under other indentures. Chase acts as depository for funds of, extends
credit to (such credit constituting senior debt), 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 Debentures set forth opposite its name.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
-----------
<S> <C>
Salomon Brothers Inc........................................... $275,000,000
ABN AMRO Securities (USA) Inc. ................................ 25,000,000
------------
Total................................................ $300,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters are subject to certain conditions precedent. The Underwriters will
be obligated to purchase all of the Debentures if any of the Debentures are
purchased.
The Company has been advised that the several Underwriters propose
initially to offer the Debentures directly to the public at the public offering
price set forth on the cover page hereof and to certain dealers at a price which
represents a concession not in excess of .35% of the principal amount. The
Underwriters may allow and such dealers may reallow a concession, not in excess
of .25% of the principal amount, to certain other dealers. After the initial
public offering, the public offering price and such concessions may be changed.
The Company will indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or contribute to payments required to be made in respect thereof.
The Company has been advised by the Underwriters that they currently intend
to make a market in the Debentures, but may discontinue such market making at
any time without notice. The Company cannot predict the liquidity of any trading
market for the Debentures.
In the ordinary course of their businesses, affiliates of ABN AMRO
Securities (USA) Inc. have engaged, and may in the future engage, in commercial
banking transactions with the Company.
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 IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION 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
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Summary Financial Information........ S-2
Description of the Debentures........ 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>
$300,000,000
ASSOCIATES CORPORATION OF NORTH AMERICA
[ASSOCIATES LOGO]
6 7/8% SUBORDINATED DEBENTURES
DUE NOVEMBER 15, 2008
SALOMON BROTHERS INC
ABN AMRO SECURITIES (USA) INC.
PROSPECTUS SUPPLEMENT
DATED NOVEMBER 5, 1996
