<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-62861
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 15, 1998)
$4,800,000,000
[ASSOCIATES LOGO]
$2,300,000,000 5.75% SENIOR NOTES DUE NOVEMBER 1, 2003
$1,500,000,000 6.25% SENIOR NOTES DUE NOVEMBER 1, 2008
$1,000,000,000 6.95% SENIOR DEBENTURES DUE NOVEMBER 1, 2018
---------------------
The Company will pay interest on the 5.75% Senior Notes due November 1,
2003 (the "2003 Notes"), the 6.25% Senior Notes due November 1, 2008 (the "2008
Notes") and the 6.95% Senior Debentures due November 1, 2018 (the "2018
Debentures", together with the 2003 Notes and the 2008 Notes, the "Notes"),
semiannually on May 1 and November 1 of each year, starting May 1, 1999, and at
maturity. The Company may not redeem the Notes prior to maturity unless certain
events occur involving United States taxation.
Application has been made to list the Notes on the Luxembourg Stock
Exchange.
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved these securities or determined if this
Prospectus Supplement or Prospectus to which it relates is truthful and
complete. 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 2003 Note..................... 99.961% 0.350% 99.611%
Total............................. $2,299,103,000 $8,050,000 $2,291,053,000
Per 2008 Note..................... 99.735% 0.450% 99.285%
Total............................. $1,496,025,000 $6,750,000 $1,489,275,000
Per 2018 Debenture................ 99.412% 0.875% 98.537%
Total............................. $994,120,000 $8,750,000 $985,370,000
</TABLE>
- ---------------------
(1) Plus accrued interest, if any, from October 30, 1998.
(2) Before deduction of expenses payable by the Company estimated at $2,880,000.
---------------------
Delivery of the Notes in book-entry form only will be made through The
Depository Trust Company on or about October 30, 1998, against payment in
immediately available funds. The Notes have been approved for clearance through
the Cedel Bank and Euroclear systems.
---------------------
Joint Book Managers:
BEAR, STEARNS & CO. INC. WARBURG DILLON READ LLC
---------------------
CHASE SECURITIES INC. MERRILL LYNCH & CO. MORGAN STANLEY DEAN WITTER
LEHMAN BROTHERS SALOMON SMITH BARNEY
---------------------
<TABLE>
<S> <C> <C>
ABN AMRO DEUTSCHE BANK GOLDMAN, SACHS & CO.
BARCLAYS CAPITAL DONALDSON, LUFKIN & JENRETTE HSBC MARKETS
COMMERZBANK AKTIENGESELLSCHAFT DRESDNER BANK AG LONDON BRANCH SG
CREDIT SUISSE FIRST BOSTON WESTDEUTSCHE LANDESBANK GIROZENTRALE
</TABLE>
---------------------
The date of this Prospectus Supplement is October 27, 1998.
<PAGE> 2
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.
THE LUXEMBOURG STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF
THIS DOCUMENT, MAKES NO REPRESENTATION AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS ARISING FROM OR IN
RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT.
This Prospectus Supplement and the accompanying Prospectus include
particulars given in compliance with the rules governing the listing of
securities on the Luxembourg Stock Exchange for the purpose of giving
information with regard to the Company. The Company accepts full responsibility
for the accuracy of the information contained or incorporated by reference in
this Prospectus Supplement and the accompanying Prospectus and confirms, having
made all reasonable inquiries, that to the best of its knowledge and belief
there are no other facts the omission of which would make any statement
contained or incorporated by reference herein misleading in any material
respect.
In this Prospectus Supplement and accompanying Prospectus, unless otherwise
specified or the context otherwise requires, references to "dollars", "$" and
"U.S.$" are to United States dollars.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1997 (the "1997 10-K Report"), its Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1998, and June 30, 1998 (the "1998 10-Q Reports") and
its Current Reports on Form 8-K filed as of January 7, 1998, January 20, 1998,
March 3, 1998, March 25, 1998, April 8, 1998, April 14, 1998, April 17, 1998,
May 5, 1998, May 22, 1998, June 25, 1998, July 14, 1998, July 28, 1998, August
11, 1998, August 26, 1998, September 29, 1998, and October 13, 1998 (the "1998
8-K Reports"), are incorporated in this Prospectus Supplement by reference. All
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 after the date of this Prospectus Supplement
and prior to the termination of the offering of the Notes shall be incorporated
by reference into this Prospectus Supplement and shall be deemed a part of this
Prospectus Supplement from the date of the filing of such documents.
The financial statements in this Prospectus Supplement and accompanying
Prospectus, incorporated by reference to the 1997 10-K Report, have been
incorporated herein in reliance on the report of PricewaterhouseCoopers LLP
("PricewaterhouseCoopers"), independent accountants, given on the authority of
that firm as experts in accounting and auditing and have been audited by
PricewaterhouseCoopers to the extent indicated in their report.
PricewaterhouseCoopers have given and not withdrawn their written consent
to the issue of this Prospectus Supplement and the accompanying Prospectus with
the incorporation by reference herein of their report in the 1997 10-K Report on
the audited financial statements of the Company for the financial years ended
December 31, 1997.
This Prospectus Supplement and accompanying Prospectus, together with the
documents incorporated by reference herein, will be available free of charge at
the main office of Banque Internationale a Luxembourg S.A., 69 route d'Esch
L-1470, Luxembourg.
S-2
<PAGE> 3
THE COMPANY
GENERAL
Associates Corporation of North America, a Delaware corporation (the
"Company"), is a wholly-owned subsidiary and the principal operating unit of
Associates First Capital Corporation ("AFCC").
The Company is a leading, diversified consumer and commercial finance
organization which provides finance, leasing and related services to individual
consumers and businesses in the United States. At September 30, 1998, the
Company had aggregate net finance receivables of $44.8 billion, total assets of
$54.8 billion, and stockholders' equity of $6.8 billion. The Company is one of
the largest independent finance companies in the United States. The Company's
finance receivables are geographically dispersed across the United States and
Puerto Rico. At December 31, 1997, 12% of such receivables were in California,
7% in Florida, 7% in Texas, and no other individual state had more than 5%.
The Company divides its diverse activities into consumer finance and
commercial finance. As part of its consumer finance and commercial finance
activities, the Company makes available to its customers credit-related and
other insurance products.
Although the Company's finance operations are confined to the United States
and Puerto Rico, certain subsidiaries of AFCC which are also affiliates of the
Company operate outside the United States, including in Japan, the United
Kingdom, Canada, Mexico, Costa Rica and Taiwan. The Company provides certain
management and other services relating to these foreign operations. The results
of such foreign operations are not included in the financial or statistical
information of the Company presented herein.
At December 31, 1997, the Company had 1,580 branch offices geographically
dispersed throughout the United States and Puerto Rico and employed
approximately 18,800 persons.
RECENT DEVELOPMENTS
On August 11, 1998, AFCC announced that it had agreed to acquire the assets
and assume the liabilities of Avco Financial Services, Inc. ("Avco"). AFCC has
not yet determined the extent to which the Company would acquire assets or
assume liabilities of Avco. AFCC expects the acquisition to be completed in late
1998 or early 1999, subject to regulatory approvals and other customary
conditions. Following the announcement, each of Fitch Investors Service, L.P.
and Moody's Investors Service, Inc. placed the ratings of the Company's
long-term debt under review for possible downgrade due to the possible effect of
the acquisition on the Company, while each of Standard & Poor's Rating Services
and Duff & Phelps Credit Rating Co. reaffirmed the ratings of the Company's
long-term debt.
CONSUMER FINANCE
The Company's consumer finance operations provide a variety of consumer
financing products and services, including home equity lending, personal
lending, retail sales finance and purchasing participation in credit card
receivables originated by an affiliate, Associates National Bank (Delaware).
S-3
<PAGE> 4
The following table shows net finance receivables outstanding attributable
to the various types of consumer financing products:
CONSUMER NET FINANCE RECEIVABLES OUTSTANDING
<TABLE>
<CAPTION>
AT DECEMBER 31
AT JUNE 30 ---------------------------------
1998 1997 1996 1995
----------- --------- --------- ---------
(UNAUDITED) (IN MILLIONS)
<S> <C> <C> <C> <C>
Home Equity Lending(1).......................... $19,127.1 $17,437.3 $15,435.9 $13,190.4
Personal Lending/Sales Finance.................. 6,739.0 6,920.6 5,786.5 4,752.7
Credit Card(2).................................. 1,382.5 7,333.6 5,517.1 4,616.8
Manufactured Housing(3)......................... 19.3 24.1 1,257.6 2,049.3
--------- --------- --------- ---------
Total Consumer........................ $27,267.9 $31,715.6 $27,997.1 $24,609.2
========= ========= ========= =========
</TABLE>
- ---------------
(1) In March 1998, the Company securitized and sold approximately $235 million
of home equity lending receivables.
(2) In April 1998, the Company sold, at book value, $5.2 billion of the
Company's participation in the U.S. bankcard credit card receivables of AFCC
in connection with a securitization transaction by AFCC.
(3) The Company considers its manufactured housing activities to be a commercial
business principally because the predominant portion of its financing
receivables is obtained from its relationships with manufacturers and
dealers, notwithstanding that the credit and related risks typically are
those of the consumer purchaser of the housing.
COMMERCIAL FINANCE
The Company's commercial finance operations provide a variety of retail and
wholesale financing and leasing products and services for heavy-duty (Class 8)
and medium-duty (Classes 3 through 7) trucks and truck trailers and
construction, material handling and other industrial and communications
equipment. The Company believes that it is a leading independent source of
financing for heavy-duty trucks and truck trailers in the United States. The
Company also engages in a number of other commercial activities, including auto
fleet leasing and fleet management services, Small Business Administration
lending, employee relocation services and municipal finance.
The following table shows net finance receivables outstanding attributable
to the various types of commercial financing products:
COMMERCIAL NET FINANCE RECEIVABLES OUTSTANDING
<TABLE>
<CAPTION>
AT DECEMBER 31
AT JUNE 30 ---------------------------------
1998 1997 1996 1995
----------- --------- --------- ---------
(UNAUDITED) (IN MILLIONS)
<S> <C> <C> <C> <C>
Truck and Truck Trailer......................... $ 9,567.9 $ 9,011.1 $ 8,077.6 $ 7,415.7
Equipment(1).................................... 4,542.2 4,899.8 4,261.4 3,729.1
Auto Fleet Leasing.............................. 1,469.7 1,418.9 1,087.4 327.1
Warehouse Lending and Other(2).................. 969.5 809.1 355.4 287.2
--------- --------- --------- ---------
Total Commercial...................... $16,549.3 $16,138.9 $13,781.8 $11,759.1
========= ========= ========= =========
Manufactured Housing(3)......................... $ 19.3 $ 24.1 $ 1,257.6 $ 2,049.3
========= ========= ========= =========
</TABLE>
- ---------------
(1) In March 1998, approximately $650 million of equipment finance receivables
were sold at book value to AFCC.
(2) Includes warehouse lending, Small Business Administration lending and
municipal finance (prior to 1997, municipal finance was included in truck
and truck trailer and equipment net finance receivables).
(3) Except as otherwise indicated, the dollar amount of manufactured housing
receivables is included in the dollar amount of total consumer net finance
receivables throughout this document, because the credit and related risks
of the manufactured housing business are similar to those of the Company's
consumer finance business. However, manufactured housing operations are
described as part of the Company's commercial activities because the
marketing and management of manufactured housing finance products
S-4
<PAGE> 5
are more closely related to commercial finance products. During 1997 and
1996, AFCC or the Company securitized and sold approximately $800 million
and $1.3 billion, respectively, of manufactured housing retail finance
receivables, which reduced the dollar amount of participation owned by the
Company in such receivables. In 1996, the servicing rights to such
securitizations were transferred to Associates Housing Finance Services,
Inc. ("AHFS"), an affiliate and subsidiary of AFCC. During 1997, the Company
sold, at net book value, substantially all of its outstanding manufactured
housing finance receivables to AHFS. Immediately subsequent to the sale, the
Company repurchased a participation interest, at net book value, in
substantially all of such receivables. Such participation was included in
the net finance receivables of the Company until December 31, 1997 when the
participation agreement was terminated. As of December 31, 1997, the
receivables of the manufactured housing business were included in the
consolidated accounts of AFCC and $24.1 million of manufactured housing
receivables (which were not included in the AFCC participation agreement)
were included in the accounts of the Company.
RELATED INSURANCE
The Company, through certain of its subsidiaries and other third party
insurance providers, makes available various credit and non-credit insurance
products to its finance customers. Insurance products offered to the Company's
consumer finance customers include credit life, credit accident and health,
accidental death and dismemberment, involuntary unemployment and personal
property insurance. Insurance products offered to the Company's commercial
finance customers include commercial auto and dealers' open lot physical damage,
credit life and motor truck cargo insurance. In addition to insurance
underwriting, the Company also receives compensation for certain insurance
programs underwritten by other companies. The Company underwrites liability
insurance in certain states for its commercial auto physical damage customers.
BOARD OF DIRECTORS
Set forth below are the names, the principal occupations and directorships
in non-affiliated companies (if any) of the current members of the Board of
Directors of the Company, each of whose business address in his capacity as a
Director of the Company is at the Company's principal executive office.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
AND PRINCIPAL
NAME EXTERNAL DIRECTORSHIPS
- ---- ----------------------
<S> <C>
Keith W. Hughes...................... Chairman of the Board, Chief Executive Officer and Director
of the Company; Director of VISA USA, Inc. and VISA
International Service Association
Harold D. Marshall................... President, Chief Operating Officer and Director of the
Company
Roy A. Guthrie....................... Senior Executive Vice President, Chief Financial Officer and
Director of the Company
</TABLE>
S-5
<PAGE> 6
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 1997 10-K Report and its Quarterly Report on Form
10-Q for the six months ended June 30, 1998, available as described under
"General Information" in this Prospectus Supplement and under "Available
Information" in the accompanying Prospectus, 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
---------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges................. $3,250.7 $3,866.7 $4,805.3 $5,580.3 $6,428.5 $3,112.7 $3,048.0
Insurance premiums.............. 242.2 293.5 325.1 354.8 370.1 180.5 186.7
Investment and other income..... 196.7 227.7 254.0 286.3 352.5 167.7 360.9
-------- -------- -------- -------- -------- -------- --------
3,689.6 4,387.9 5,384.4 6,221.4 7,151.1 3,460.9 3,595.6
Expenses --
Interest expense................ 1,291.8 1,509.7 1,979.8 2,206.7 2,543.9 1,207.7 1,402.9
Operating expenses.............. 979.6 1,191.6 1,417.8 1,603.3 1,842.5 882.5 847.1
Provision for losses on finance
receivables................... 468.9 569.9 729.7 963.4 1,195.6 603.1 532.4
Insurance benefits paid or
provided...................... 114.9 144.1 135.7 142.9 142.1 71.2 72.0
-------- -------- -------- -------- -------- -------- --------
2,855.2 3,415.3 4,263.0 4,916.3 5,724.1 2,764.5 2,854.4
-------- -------- -------- -------- -------- -------- --------
Earnings Before Provision for
Income Taxes.................... 834.4 972.6 1,121.4 1,305.1 1,427.0 696.4 741.2
Provision for Income Taxes........ 310.7 369.1 413.3 482.0 524.5 255.3 269.2
-------- -------- -------- -------- -------- -------- --------
Net Earnings...................... $ 523.7 $ 603.5 $ 708.1 $ 823.1 $ 902.5 $ 441.1 $ 472.0
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges(a)...................... 1.64 1.64 1.56 1.59 1.56 1.57 1.52
======== ======== ======== ======== ======== ======== ========
</TABLE>
- ---------------
(a) For purposes of computing the Ratio of Earnings to Fixed Charges, "earnings"
represent earnings before provision for income taxes, plus fixed charges.
"Fixed charges" represent interest expense and a portion of rentals
representative of an implicit interest factor for such rentals.
S-6
<PAGE> 7
SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
1997 1998
----------- -----------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents................................. $ 294.8 $ 199.7
Investments in Debt and Equity Securities
Bonds and Notes........................................ 1,022.5 1,260.6
Stocks................................................. 131.0 602.6
--------- ---------
Total Investments in Debt and Equity Securities... 1,153.5 1,863.2
Finance Receivables, net of unearned finance income
Consumer Finance....................................... 31,715.6 27,267.9
Commercial Finance..................................... 16,138.9 16,549.3
--------- ---------
Total Net Finance Receivables..................... 47,854.5 43,817.2
Allowance for Losses on Finance Receivables............... (1,661.9) (1,387.3)
Insurance Policy and Claims Reserves...................... (762.4) (774.1)
Other Assets.............................................. 3,652.6 9,084.7
--------- ---------
Total Assets...................................... $50,531.1 $52,803.4
========= =========
Liabilities and Stockholders' Equity:
Notes Payable, unsecured short-term
Commercial paper....................................... $17,184.5 $18,583.3
Bank loans............................................. 1,202.1 --
Long-Term Debt, unsecured due within one year
Senior................................................. 4,190.5 5,913.6
Subordinated........................................... -- --
Capital................................................ 0.1 0.1
Accounts Payable and Accruals............................. 960.4 890.8
Long-Term Debt, unsecured
Senior................................................. 20,519.5 20,468.5
Subordinated........................................... 425.0 425.0
Capital................................................ 0.3 0.3
--------- ---------
Total Long-Term Debt.............................. 20,944.8 20,893.8
Stockholders' Equity...................................... 6,048.7 6,521.8
--------- ---------
Total Liabilities and Stockholders' Equity........ $50,531.1 $52,803.4
========= =========
</TABLE>
---------------------
On October 13, 1998, the Company reported unaudited results for the nine
months ended September 30, 1998. Such results, compared to the unaudited results
of operations for the similar period of the prior fiscal year, were as follows:
Revenue -- $5.3 billion (1998), $5.3 billion (1997); Earnings before Provision
for Income Taxes -- $1,122.5 million (1998), $1,061.1 million (1997); and Net
Earnings -- $711.9 million (1998), $671.1 million (1997).
S-7
<PAGE> 8
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company and its subsidiaries at June 30, 1998, derived without material
adjustment from the unaudited financial statements of the Company included in
its Quarterly Report on Form 10-Q for the six months ended June 30, 1998, and is
qualified in its entirety by the detailed information set forth therein:
<TABLE>
<CAPTION>
AMOUNT OUTSTANDING
-----------------------
JUNE 30 AS
1998 ADJUSTED(1)
--------- -----------
(IN MILLIONS)
<S> <C> <C>
DEBT:
Commercial Paper and other borrowings(2).................. $24,497.0 $ 22,497.0
Long-Term Debt, unsecured
Senior Notes........................................... 20,468.5 20,468.5
Senior Notes offered hereby............................ -- 4,800.0
Subordinated Notes..................................... 425.0 425.0
Capital Notes.......................................... 0.3 0.3
--------- -----------
Total Long-Term Debt.............................. 20,893.8 25,693.8
STOCKHOLDERS' EQUITY:
Class B Common Stock, $100 Par Value, 2,000,000 shares
authorized, 1,000,000 shares issued and outstanding.... 100.0 100.0
Common Stock, no par value, 5,000 shares authorized, 260
shares issued and outstanding, at stated value......... 47.0 47.0
Paid-in Capital........................................... 1,667.8 1,667.8
Retained Earnings......................................... 4,701.5 4,701.5
Accumulated Other Comprehensive Income.................... 5.5 5.5
--------- -----------
Total Stockholders' Equity........................ 6,521.8 6,521.8
--------- -----------
TOTAL CAPITALIZATION........................................ $51,912.6 $ 54,712.6
========= ===========
</TABLE>
- ---------------
(l) The information in the column "Amount Outstanding -- As Adjusted" is based
upon the amounts outstanding at June 30, 1998, as adjusted to give effect to
the proposed issuance of the Notes offered hereby and the application of $2
billion of the net proceeds from the sale of the Notes to the reduction of
Commercial Paper and other borrowings. See "Application of Proceeds" below.
There has been no material change in the consolidated capitalization of the
Company considered as a whole since June 30, 1998. Accordingly, no
adjustments have been made for debt issuances and retirements in the
ordinary course of the Company's financing activities subsequent to June 30,
1998, except with respect to the issuance of the Notes.
(2) Includes $5.9 billion of long-term debt due within one year. The Company
maintains credit facilities in support of its short-term borrowings. At June
30, 1998, the Company's short-term bank lines, revolving credit facilities
and receivables purchase facilities with banks aggregated $16.7 billion
(none of which was utilized at such date).
S-8
<PAGE> 9
APPLICATION OF PROCEEDS
Approximately $2,000,000,000 of the net proceeds from the sale of the Notes
will be applied to the reduction of commercial paper and other borrowings due
within one year. The remaining net proceeds of approximately $2,762,818,000 will
be added to the general funds of the Company to be applied to fund investments
in, or extensions of credit to, its subsidiaries; to reduce other outstanding
indebtedness; or to fund acquisitions by the Company and its subsidiaries of
other companies or finance receivables. The Company has not yet determined the
specific timing and application of such remaining proceeds; pending such
application, such remaining net proceeds will be invested in short-term
instruments or other cash equivalents. Depending upon the timing of the pending
AFCC acquisition of Avco's assets and the extent to which the Company would
acquire assets in connection therewith, a portion of the proceeds remaining at
such time may be applied by the Company to fund any acquisition by it of Avco's
assets. See "The Company -- Recent Developments."
DESCRIPTION OF THE NOTES
The following description of the specific terms of the Notes (referred to
in the attached Prospectus as "Debt Securities") supplements the more general
description of the Debt Securities contained in the Prospectus. If there are any
inconsistencies between the information in this section and the information in
the Prospectus, the information in this section controls. Investors should read
this section together with the section called "Description of Debt Securities"
in the Prospectus. Any capitalized terms that are defined in the Prospectus have
the same meanings in this section unless a different definition appears in this
section. The Company qualifies the description of the Notes by reference to the
Indenture.
GENERAL
The Notes:
- will be senior debt of the Company;
- will be issued as separate series under the Indenture between the Company
and the Trustee, The Chase Manhattan Bank ("Chase"), dated as of November
1, 1995;
- will be limited in aggregate principal amount to $2,300,000,000 (in the
case of the 2003 Notes), $1,500,000,000 (in the case of the 2008 Notes)
and $1,000,000,000 (in the case of the 2018 Debentures) (subject to
increase by any further issues designated as part of the same series);
- will mature and become due and payable, at 100% of their principal amount
together with any accrued and unpaid interest, on November 1, 2003 (in
the case of the 2003 Notes), November 1, 2008 (in the case of the 2008
Notes) and November 1, 2018 (in the case of the 2018 Debentures);
- will not be redeemable by the Company prior to maturity unless certain
events occur involving United States taxation (see "-- Redemption for Tax
Reasons"); and
- will not be subject to any sinking fund.
INTEREST
The Notes will bear interest at the rate of 5.75% per annum (in the case of
the 2003 Notes), 6.25% per annum (in the case of the 2008 Notes) and 6.95% per
annum (in the case of the 2018 Debentures). Interest will accrue from October
30, 1998 or from the most recent Interest Payment Date to which interest has
been paid or provided for. The Company will make interest payments semiannually
on May 1 and November 1 of each year, starting May 1, 1999 (each an "Interest
Payment Date") and at maturity. The Company will make interest payments to the
person in whose name the Notes are registered at the close of business on the
April 15 and October 15 before the next Interest Payment Date. If the Interest
Payment Date is not a Business Day at the relevant place of payment, payment of
interest will be made on the next day that is a Business Day at such place of
payment. "Business Day" means any day that is not a Saturday or Sunday, and that
is not a day on
S-9
<PAGE> 10
which banking institutions are generally authorized or obligated by law to close
in The City of New York and, for any place of payment outside of The City of New
York, in such place of payment.
Interest on the Notes will be computed on the basis of a 360-day year of
twelve 30-day months.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will pay, subject to certain exceptions set forth below and to
the Company's right of redemption for tax reasons, to a holder of a Note, such
additional amounts as may be necessary in order that every net payment of the
principal of and interest on any Note, after deduction or withholding for or on
account of any present or future tax, assessment or other governmental charge
imposed upon such holder, or by reason of the making of such payments, by the
United States or any taxing authority thereof or therein, will not be less than
the amount provided for in such Note to be then due and payable ("Additional
Amounts"). The Company shall not be required, however, to make any payment for
any Additional Amounts for or on account of:
(i) any tax, assessment or other governmental charge which would not
have been imposed but for (A) the existence of 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 or any
political subdivision or taxing authority thereof or therein, 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) a bank receiving interest
described in Section 881(c)(3)(A) of the United States Internal Revenue
Code of 1986, as amended (the "Code") or (C) such holder's present or
future status as 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;
(ii) any estate, inheritance, gift, sales, use, transfer, excise,
personal property or similar tax, assessment or other governmental charge;
(iii) any tax, assessment or other governmental charge that is imposed
or withheld solely by reason of a change in law, regulation or
administrative or judicial interpretation that becomes effective more than
30 days after the payment becomes due or is duly provided for, whichever
occurs later;
(iv) any tax, assessment or other governmental charge which is (A)
payable otherwise than by withholding from payment of principal of, or
interest on, such Note or (B) required to be withheld by any paying agent
from any such payment, if such payment may be made without withholding by
any other paying agent outside the United States;
(v) any tax, assessment or other governmental charge which would not
have been imposed but for the failure to comply with certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections of the holder or beneficial
owner of such Note, if such compliance is required by statute or by
regulation of the United States or any political subdivision or taxing
authority thereof or therein or by an applicable tax treaty to which the
United States is a party as a precondition to relief or exemption from such
tax, assessment or other governmental charge;
(vi) any tax, assessment or other governmental charge imposed on
interest received by a holder or beneficial owner of a Note that is a 10%
shareholder (as defined in Section 871(h)(3)(B) of the Code, and the
regulations that may be promulgated thereunder) of the Company or is a
controlled foreign corporation related to the Company within the meaning of
Section 864(d)(4) of the Code; or
(vii) any combination of items (i) through (vi);
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nor shall any Additional Amounts be paid to any holder who is a fiduciary or
partnership or other than the sole beneficial owner of such Note to the extent
that a beneficiary or settlor with respect to such fiduciary, or a member of
such partnership or a beneficial owner thereof would not have been entitled to
the payment of such Additional Amounts had such beneficiary, settlor, member or
beneficial owner been the holder of the Note.
REDEMPTION FOR TAX REASONS
Subject to the conditions described below, the Notes of each series may be
redeemed, as a whole but not in part, at the option of the Company upon not more
than 60 days nor less than 30 days prior notice to the holders thereof at a
redemption price equal to 100% of their principal amount, together with interest
accrued, if any, to but excluding the date fixed for redemption, if on the next
succeeding Interest Payment Date the Company determines that, as a result of any
change in or amendment to the laws or treaties, or any regulations or rulings
promulgated thereunder, of the United States affecting taxation, or any proposed
change in such laws, treaties, regulations or rulings, or any change in the
official application, enforcement or interpretation of such laws, treaties,
regulations or rulings (including a holding by a court of competent jurisdiction
in the United States affecting taxation) which change or amendment is made
effective or is proposed on or after the original issue date of the Notes of
such series, or any other action predicated on such amendment or change taken by
any taxing authority or court of competent jurisdiction in the United States or
the official proposal of such action, whether or not such action or proposal was
taken or made with respect to the Company, the Company has or will become
obligated to pay Additional Amounts on any Note of such series and such
obligation cannot be avoided by the Company by any reasonable measures available
to it which (in the good faith opinion of the Company) will not have a material
adverse impact on the conduct of its business. Prior to the giving of any such
notice of redemption, the Company shall deliver to the Trustee (i) a certificate
stating that it is entitled to effect such redemption and setting forth a
supportive statement of facts and (ii) a written opinion of independent legal
counsel of recognized standing to such effect based upon such statement of
facts. In addition, no such notice of redemption shall be given earlier than 90
days prior to the earliest date on which the Company would be obligated to pay
Additional Amounts were a payment in respect of the Notes of such series then
due.
BOOK-ENTRY NOTES -- REGISTRATION, TRANSFER AND PAYMENT OF INTEREST AND PRINCIPAL
The Depositary, Cedel Bank and Euroclear
Upon issuance, the Notes of each series will be represented by one or more
fully registered global notes (the "Global Notes"). Each such Global Note will
be deposited with, or on behalf of, The Depository Trust Company or any
successor thereto (the "Depositary"), as Depositary, and registered in the name
of Cede & Co. (the Depositary's partnership nominee). Unless and until it is
exchanged in whole or in part for Notes in definitive form, no Global Note may
be transferred except as a whole by the Depositary to a nominee of such
Depositary. Investors may elect to hold interests in the Global Notes through
either the Depositary (in the United States) or Cedel Bank, societe anonyme
("Cedel Bank"), and Morgan Guaranty Trust Company of New York, Brussels Office,
as operator of the Euroclear System ("Euroclear"), if they are participants in
such systems, or indirectly through organizations which are participants in such
systems. Cedel Bank and Euroclear will hold interests on behalf of their
participants through customers' securities accounts in Cedel Bank's and
Euroclear's names on the books of their respective depositaries, which in turn
will hold such interests in customers' securities accounts in the depositaries'
names on the books of the Depositary. Citibank, N.A. will act as depositary for
Cedel Bank and The Chase Manhattan Bank will act as depositary for Euroclear (in
such capacities, the "U.S. Depositaries").
So long as the Depositary, or its nominee, is a registered owner of a
Global Note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or Holder of the Notes represented by such Global Note
for all purposes under the Indenture. Except as provided below, the actual
owners of the Notes represented by a Global Note (the "Beneficial Owners") will
not be entitled to have the Notes represented by such Global Note registered in
their names, will not receive or be entitled to receive physical delivery of the
Notes in definitive form and will not be considered the owners or Holders
thereof under the Indenture,
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including for purposes of receiving any reports delivered by the Company or the
Trustee pursuant to the Indenture. Accordingly, each person owning a beneficial
interest in a Global Note must rely on the procedures of the Depositary and, if
such person is not a participant of the Depositary (a "Participant"), on the
procedures of the Participant through which such person owns its interest, to
exercise any rights of a Holder under the Indenture. The Company understands
that under existing industry practices, in the event that the Company requests
any action of Holders or that an owner of a beneficial interest which a Holder
is entitled to give or take under the Indenture, the Depositary would authorize
the Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize Beneficial Owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of Beneficial Owners. Conveyance of notices and other
communications by the Depositary to Participants, by Participants to Indirect
Participants, as defined below, and by Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
The Depositary may discontinue providing its services as securities
depositary with respect to the Notes at any time by giving reasonable notice to
the Company or the Trustee. Under such circumstances, if a successor depositary
is not appointed by the Company within 90 days, the Company will issue
individual definitive Notes in exchange for all the Global Notes representing
such Notes. In addition, the Company may at any time and in its sole discretion
determine not to have the Notes of any series represented by Global Notes and,
in such event, will issue individual definitive Notes in exchange for all the
Global Notes representing the Notes of such series. Individual definitive Notes
so issued will be issued in denominations of $1,000 and any larger amount that
is an integral of $1,000 and registered in such names as the Depositary shall
direct.
The following is based on information furnished by the Depositary:
The Depositary will act as securities depositary for the Notes. The Notes
will be issued as fully registered notes registered in the name of Cede & Co.
(the Depositary's partnership nominee). One or more fully registered Global
Notes will be issued for each series of Notes in the aggregate principal amount
of such series, and will be deposited with the Depositary.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, 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, as amended. The Depositary holds securities that its
Participants deposit with the Depositary. The Depositary also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants of the Depositary
("Direct Participants") include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. The Depositary
is owned by a number of its Direct Participants and by The New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National Association
of Securities Dealers, Inc. Access to the Depositary's system is also available
to others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable to
the Depositary and its Participants are on file with the Securities and Exchange
Commission.
Purchases of Notes under the Depositary's system must be made by or through
Direct Participants, which will receive a credit for the Notes on the
Depositary's records. The ownership interest of each Beneficial Owner is in turn
to be recorded on the records of Direct Participants and Indirect Participants.
Beneficial Owners will not receive written confirmation from the Depositary of
their purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct Participants or Indirect
Participants through which such Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Notes are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Notes, except as provided above.
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To facilitate subsequent transfers, all Notes deposited with the Depositary
are registered in the name of the Depositary's partnership nominee, Cede & Co.
The deposit of Notes with the Depositary and their registration in the name of
Cede & Co. effect no change in beneficial ownership. The Depositary has no
knowledge of the actual Beneficial Owners of the Notes; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such
Notes are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Notes. Under its usual procedures, the Depositary mails an Omnibus Proxy to
the Company as soon as possible after the applicable record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal, Additional Amounts, if any, and/or interest payments on the
Notes will be made in immediately available funds to the Depositary. The
Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown on
the Depositary's records unless the Depositary has reason to believe that it
will not receive payment on such date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name", and will be the responsibility of such Participant
and not of the Depositary, the Trustee or the Company, subject to any statutory
or regulatory requirements as may be in effect from time to time. Payment of
principal, Additional Amounts, if any, and/or interest to the Depositary is the
responsibility of the Company or the Trustee, disbursement of such payments to
Direct Participants shall be the responsibility of the Depositary, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct Participants and Indirect Participants.
Cedel Bank advises that it is incorporated under the laws of Luxembourg as
a professional depositary. Cedel Bank holds securities for its participating
organizations ("Cedel Participants") and facilitates the clearance and
settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Cedel Bank provides
to Cedel Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Cedel Bank interfaces with domestic
markets in several countries. As a professional depositary, Cedel Bank is
subject to regulation by the Luxembourg Monetary Institute. Cedel Participants
are recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the Underwriters. Indirect
access to Cedel Bank is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Cedel Participant either directly or indirectly.
Distributions with respect to the Notes held beneficially through Cedel
Bank will be credited to cash accounts of Cedel Participants in accordance with
its rules and procedures, to the extent received by the U.S. Depositary for
Cedel Bank.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euro-clear Clearance Systems S.C., a Belgian
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cooperative corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the Underwriters. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to Notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary for
Euroclear.
Global Clearance and Settlement Procedures
Initial settlement for the Notes will be made in immediately available
funds. Secondary market trading between the Depositary Participants will occur
in the ordinary way in accordance with the Depositary's rules and will be
settled in immediately available funds using the Depositary's Same-Day Funds
Settlement System. Secondary market trading between Cedel Participants and/or
Euroclear Participants will occur in the ordinary way in accordance with the
applicable rules and operating procedures of Cedel Bank and Euroclear and will
be settled using the procedures applicable to conventional eurobonds in
immediately available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depositary on the one hand, and directly or indirectly through Cedel
or Euroclear Participants, on the other, will be effected in the Depositary in
accordance with the Depositary's rules on behalf of the relevant European
international clearing system by its U.S. Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its U.S.
Depositary to take action to effect final settlement on its behalf by delivering
or receiving Notes in the Depositary, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
the Depositary. Cedel Participants and Euroclear Participants may not deliver
instructions directly to the Depositary.
Because of time-zone differences, credits of Notes received in Cedel Bank
or Euroclear as a result of a transaction with a Depositary Participant will be
made during subsequent securities settlement processing and will be credited the
business day following the Depositary settlement date. Such credits or any
transactions in such Notes settled during such processing will be reported to
the relevant Euroclear or Cedel Participants on such business day. Cash received
in Cedel Bank or Euroclear as a result of sales of Notes by or through a Cedel
Participant or a Euroclear Participant to a Depositary Participant will be
received with value on the Depositary settlement date but will be available in
the relevant Cedel Bank or Euroclear cash account only as of the business day
following settlement in the Depositary.
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Although the Depositary, Cedel Bank and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of Notes among
participants of the Depositary, Cedel Bank and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such procedures
may be discontinued at any time.
NOTICES, DEFINITIVE NOTES AND TRANSFERS
Notices to holders of the Notes will be sent by mail to the registered
holders and, so long as the Notes are listed on the Luxembourg Stock Exchange,
will be published in a daily newspaper of general circulation in Luxembourg. It
is expected that publication will be made in the Luxemburger Wort. Any such
notice shall be deemed to have been given on the date of such publication or, if
published more than once, on the date of the first such publication.
In the event definitive Notes are issued, the holders thereof will be able
to receive payments thereon and effect transfers thereof at the offices of Chase
Manhattan Bank Luxembourg S.A. or its successor as paying agent in Luxembourg
with respect to the Notes. The Indenture provides for the replacement of a
mutilated, lost, stolen or destroyed definitive Note, so long as the applicant
shall furnish to the Company and the Trustee such security or indemnity as may
be required by them to save each of them harmless and such evidence of ownership
of such Note as they may require.
The Company has appointed Chase Manhattan Bank Luxembourg S.A. as a paying
agent in Luxembourg with respect to the Notes, and as long as the Notes are
listed on the Luxembourg Stock Exchange, the Company will maintain a paying
agent in Luxembourg and any change in the Luxembourg paying agent and transfer
agent will be published in Luxembourg.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes are transferable, in whole or in part, upon surrender of the
Notes for registration of transfer at the corporate trust office of the Trustee
in The City of New York, or, in the event definitive Notes are issued and so
long as the Notes are listed on the Luxembourg Stock Exchange, at the offices of
the paying agent in Luxembourg, duly endorsed by or accompanied by a written
instrument of transfer in form satisfactory to the Company and the securities
registrar, and thereupon one or more new Notes, for the aggregate principal
amount being transferred, will be issued to the designated transferee, and a new
Note for any amount not being transferred will be issued to the transferor.
FURTHER ISSUES
The Company may from time to time, without notice to or the consent of the
registered holders of the Notes of any series, create and issue further notes of
such series ranking pari passu with the Notes of such series in all respects (or
in all respects except for the payment of interest accruing prior to the issue
date of such further notes or except for the first payment of interest following
the issue date of such further notes) and so that such further notes may be
consolidated and form a single series with the Notes of such series and have the
same terms as to status, redemption or otherwise as the Notes of such series.
GOVERNING LAW
The Indenture and the Notes for all purposes shall be governed by and
construed in accordance with the laws of the State of New York.
CONCERNING THE TRUSTEE
Chase is the trustee for thirty-one other series of debt securities which
the Company has issued under the Indenture. Additionally, Chase is the trustee
for other debt securities which the Company issued under indentures originally
executed by Manufacturers Hanover Trust Company and Chemical Bank. The Company
also uses Chase for other banking services in the normal course of its business.
Chase is an affiliate of Chase Securities Inc., one of the Underwriters.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material United States federal income
tax consequences of the ownership of Notes as of the date hereof. Except where
noted, it deals only with Notes held as capital assets and does not deal with
special situations, such as those of dealers in securities or currencies,
financial institutions, tax-exempt entities, life insurance companies, persons
holding Notes as a part of a hedging, conversion or constructive sale
transaction or a straddle or holder of Notes whose "functional currency" is not
the U.S. dollar. Furthermore, the discussion below is based upon the provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations,
rulings and judicial decisions thereunder as of the date hereof, and such
authorities may be repealed, revoked or modified so as to result in United
States federal income tax consequences different from those discussed below.
Persons considering the purchase, ownership or disposition of Notes should
consult their own tax advisors concerning the United States federal income tax
consequences in light of their particular situations as well as any consequences
arising under the laws of any other taxing jurisdiction.
PAYMENTS OF INTEREST
Except as set forth below, interest on a Note will generally be taxable to
a United States Holder as ordinary income from domestic sources at the time it
is paid or accrued in accordance with the United States Holder's method of
accounting for tax purposes. As used herein, a "United States Holder" of a Note
means a holder that is (i) a citizen or resident of the United States, (ii) a
corporation or partnership created or organized in or under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is subject to United States federal income taxation regardless of its
source or (iv) a trust which is subject to the supervision of a court within the
United States and the control of a United States person as described in section
7701(a)(30) of the Code. A "Non-United States Holder" is a holder that is not a
United States Holder.
SALE, EXCHANGE AND RETIREMENT OF NOTES
A United States Holder's tax basis in a Note will, in general, be the
amount the United States Holder paid for such Note. Upon the sale, exchange,
retirement or other disposition of a Note, a United States Holder will recognize
gain or loss equal to the difference between the amount realized upon the sale,
exchange, retirement or other disposition (less any accrued qualified stated
interest, which will be taxable as such) and the adjusted tax basis of the Note.
Capital gains of individuals derived in respect of capital assets held for more
than one year are eligible for reduced rates of taxation. The deductibility of
capital losses is subject to limitations.
TAX CONSEQUENCES OF SATISFACTION AND DISCHARGE
In that event the Company discharges its obligations under the Notes,
pursuant to satisfaction and discharge provisions of the Indenture, the IRS may
take the view that such a discharge constitutes the retirement of the Notes and
the issuance of new obligations with the result that United States Holders of
the Notes would recognize any gain or loss realized on such a retirement,
although any such gain would generally not be taxable to Non-United States
Holders under the circumstances outlined below. Furthermore, following
discharge, the Notes might be subject to withholding, backup withholding and/or
information reporting.
NON-UNITED STATES HOLDERS
Under present United States federal income and estate tax law, and subject
to the discussion below concerning backup withholding:
(a) no withholding of United States federal income tax will be
required with respect to the payment by the Company or any paying agent of
principal or interest on a Note owned by a Non-United States Holder,
provided (i) that the beneficial owner does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of the Company entitled to vote within the meaning of section 871(h)(3) of
the Code and the regulations thereunder, (ii) the beneficial owner is not a
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controlled foreign corporation that is related to the Company through stock
ownership, (iii) the beneficial owner is not a bank whose receipt of
interest on a Note is described in section 881(c)(3)(A) of the Code, (iv)
the beneficial owner satisfies the statement requirement (described
generally below) set forth in section 871(h) and section 881(c) of the Code
and the regulations thereunder and (v) such interest is not considered
contingent interest under section 871(h)(4)(A) of the Code and the
regulations thereunder;
(b) no withholding of United States federal income tax will be
required with respect to any gain or income by a Non-United States Holder
upon the sale, exchange, retirement or other disposition of a Note; and
(c) a Note beneficially owned by an individual who at the time of
death is a Non-United States Holder will not be subject to United States
federal estate tax as a result of such individual's death, provided that
such individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote within the meaning of section 871(h)(3) of the Code and provided
that the interest payments with respect to such Note would not have been,
if received at the time of such individual's death, effectively connected
with the conduct of a United States trade or business by such individual.
To satisfy the requirement referred to in (a)(iv) above, the beneficial
owner of such Note, or a financial institution holding the Note on behalf of
such owner, must provide, in accordance with specified procedures, a paying
agent of the Company with a statement to the effect that the beneficial owner is
not a United States person. Currently, these requirements will be met if (1) the
beneficial owner provides his name and address, and certifies, under penalties
of perjury, that he is not a United States person (which certification may be
made on an IRS Form W-8 (or successor form)) or (2) a financial institution
holding the Note on behalf of the beneficial owner certifies, under penalties of
perjury, that such statement has been received by it and furnishes a paying
agent with a copy thereof. Under recently finalized Treasury regulations (the
"Final Regulations"), the statement requirement referred to in (a)(iv) above may
also be satisfied with other documentary evidence for interest paid after
December 31, 1999 with respect to an offshore account or through certain foreign
intermediaries.
If a non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of premium, if
any, and interest made to such non-United States Holder will be subject to a 30%
withholding tax unless the beneficial owner of the Note provides the Company or
its paying agent, as the case may be, with a properly executed (1) IRS Form 1001
(or successor form) claiming an exemption from withholding under the benefit of
a tax treaty or (2) IRS Form 4224 (or successor form) stating that interest paid
on the Note is not subject to withholding tax because it is effectively
connected with the beneficial owner's conduct of a trade or business in the
United States. Under the Final Regulations, Non-United States Holders will
generally be required to provide IRS Form W-8 in lieu of IRS Form 1001 and IRS
Form 4224, although alternative documentation may be applicable in certain
situations.
If a non-United States Holder is engaged in a trade or business in the
United States and interest on the Note is effectively connected with the conduct
of such trade or business, the non-United States Holder, although exempt from
the withholding tax discussed above, will be subject to United States federal
income tax on such interest on a net income basis in the same manner as if it
were a United States Holder. In addition, if such 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 this purpose, such interest on a Note will be included in such
foreign corporation's earnings and profits.
Any gain or income realized upon the sale, exchange, retirement or other
disposition of a Note generally will not be subject to United States federal
income tax unless (i) such gain or income is effectively connected with a trade
or business in the United States of the Non-United States Holder, or (ii) in the
case of a Non-United States Holder who is an individual, such individual is
present in the United States for 183 days or more in a taxable year of such
sale, exchange, retirement or other disposition, and certain other conditions
are met.
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INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements will apply to certain
payments of principal and interest paid on Notes and to the proceeds derived
from the sale of a Note paid to United States Holders other than certain exempt
recipients (such as corporations). A 31 percent backup withholding tax will
apply to such payments if the United States Holder (i) fails to provide a
taxpayer identification number (which for an individual would be his or her
social security number) to the payor in the manner required, (ii) is notified by
the IRS that it has failed to report payments of interest and dividends
properly, or (iii) under certain circumstances, fails to certify that it has not
been notified by the IRS that it is subject to backup withholding for failure to
report interest and dividend payments.
No information reporting or backup withholding will be required with
respect to payments made by the Company or any paying agent to Non-United States
Holders if a statement described in (a)(iv) under "Non-United States Holders"
has been received and the payor does not have actual knowledge that the
beneficial owner is a United States person.
In addition, backup withholding and information reporting will not apply if
payments of the principal or interest on a Note are paid or collected by a
foreign office of a custodian, nominee or other foreign agent on behalf of the
beneficial owner of such Note, or if a foreign office of a broker (as defined in
applicable Treasury regulations) pays the proceeds of the sale of a Note to the
owner thereof. If, however, such nominee, custodian, agent or broker is, for
United States federal income tax purposes, a United States person, a controlled
foreign corporation or a foreign person that derives 50% or more of its gross
income for certain periods from the conduct of a trade or business in the United
States, or, after December 31, 1998, if such nominee, custodian, agent or broker
is a foreign partnership, in which one or more United States persons, in the
aggregate, own more than 50% of the income or capital interests in the
partnership or if the partnership is engaged in a trade or business in the
United States, such payments will not be subject to backup withholding but will
be subject to information reporting, unless (1) such custodian, nominee, agent
or broker has documentary evidence in its records that the beneficial owner is
not a United States person and certain other conditions are met or (2) the
beneficial owner otherwise establishes an exemption.
Payments of principal and interest on a Note paid to the beneficial owner
of a Note by a United States office of a custodian, nominee or agent, or the
payment by the United States office of a broker of the proceeds of sale of a
Note, will be subject to both backup withholding and information reporting
unless the beneficial owner provides the statement referred to in (a)(iv) above
and the payor does not have actual knowledge that the beneficial owner is a
United States person or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's United States federal income tax
liability provided the required information is furnished to the IRS.
S-18
<PAGE> 19
UNDERWRITING
The Company and the Underwriters named below have entered into an
underwriting agreement dated October 27, 1998. Under the underwriting agreement,
the Company has agreed to sell, and each Underwriter has agreed to purchase, the
amount of the Notes set forth opposite its name.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITERS OF 2003 NOTES OF 2008 NOTES OF 2018 DEBENTURES
- ------------ ---------------- ---------------- ------------------
<S> <C> <C> <C>
Bear, Stearns & Co. Inc.............. $1,035,025,000 $ 675,100,000 $ 450,250,000
Warburg Dillon Read LLC.............. 1,035,025,000 675,100,000 450,250,000
Chase Securities Inc................. 23,000,000 15,000,000 10,000,000
Lehman Brothers Inc.................. 23,000,000 15,000,000 10,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............. 23,000,000 15,000,000 10,000,000
Morgan Stanley & Co. International
Limited............................ 23,000,000 15,000,000 10,000,000
Salomon Smith Barney Inc............. 23,000,000 15,000,000 10,000,000
ABN AMRO Bank N.V.................... 10,450,000 6,800,000 4,500,000
Barclays Bank PLC.................... 10,450,000 6,800,000 4,500,000
Commerzbank Aktiengesellschaft....... 10,450,000 6,800,000 4,500,000
Credit Suisse First Boston
Corporation........................ 10,450,000 6,800,000 4,500,000
Deutsche Bank AG London.............. 10,450,000 6,800,000 4,500,000
Donaldson, Lufkin & Jenrette
Securities Corporation............. 10,450,000 6,800,000 4,500,000
Dresdner Bank AG London Branch....... 10,450,000 6,800,000 4,500,000
Goldman, Sachs & Co.................. 10,450,000 6,800,000 4,500,000
Midland Bank plc..................... 10,450,000 6,800,000 4,500,000
Societe Generale..................... 10,450,000 6,800,000 4,500,000
Westdeutsche Landesbank
Girozentrale....................... 10,450,000 6,800,000 4,500,000
-------------- -------------- --------------
Totals..................... $2,300,000,000 $1,500,000,000 $1,000,000,000
============== ============== ==============
</TABLE>
Bear, Stearns & Co. Inc. and Warburg Dillon Read LLC are acting as joint
book managers in connection with the offering of the Notes.
The obligations of the Underwriters to purchase the Notes are subject to
certain conditions. If any of the Notes are purchased, the Underwriters will be
obligated to purchase the entire principal amount of Notes.
The Underwriters have advised us that they initially propose to offer the
Notes to the public at the prices stated on the cover page of this Prospectus
Supplement and to certain dealers at a price less a concession of no more than
.20% (in the case of the 2003 Notes), .275% (in the case of the 2008 Notes) and
.50% (in the case of the 2018 Debentures) of the principal amount of the Notes.
The Underwriters may allow, and such dealers may reallow, a discount of no more
than .20% (in the case of the 2003 Notes), .25% (in the case of the 2008 Notes)
and .25% (in the case of the 2018 Debentures) of the principal amount of the
Notes to certain other dealers. After the initial offering of the Notes, the
Underwriters may change the public offering price, the concession to selected
dealers and the allowance to other dealers.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments which the Underwriters may be required to make in respect thereof.
Certain of the Underwriters and their affiliates have provided investment
and commercial banking services to the Company. The Underwriters and their
affiliates may provide such services in the future.
Application has been made to list the Notes on the Luxembourg Stock
Exchange. There can be no assurance that such listing will be obtained. The
Notes have been approved for clearance through the Cedel Bank and Euroclear
systems.
S-19
<PAGE> 20
The Underwriters have advised the Company that they presently intend to
make a market in the Notes as permitted by applicable laws and regulations. The
Underwriters are not obligated to make a market in the Notes and they may
discontinue such market making at any time in their sole discretion.
Accordingly, there may not be adequate liquidity or adequate trading markets for
the Notes.
To facilitate this offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Notes.
Specifically, the Underwriters may over-allot in connection with the offering,
creating a short position in the Notes for their own account. In addition, to
cover over-allotments or to stabilize the price of the Notes, the Underwriters
may bid for, and purchase Notes in the open market. Finally, the Underwriters
may reclaim selling concessions allowed to broker-dealers if the Underwriters
previously distributed the Notes in transactions to cover short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Notes above independent market levels. The
Underwriters are not required to engage in these activities and may end any of
these activities at any time.
Each Underwriter has agreed that it has not offered or sold, and prior to
the date that is six months after the date of issue of the Notes it will not
offer or sell, any Notes to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
business or otherwise in circumstances which will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995. Each Underwriter has agreed that it has and will
continue to comply with all applicable provisions of the Financial Services Act
1986 with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom. Furthermore, each Underwriter has agreed
that it has only issued or passed on and will only issue or pass on in the
United Kingdom this Prospectus Supplement (or any other document received by it
in connection with the issuance of the Notes) to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom this
Prospectus Supplement or such other document may otherwise lawfully be issued or
passed upon.
Each of the Underwriters has represented and agreed that it has not and
will not offer, sell or deliver any of the Notes directly or indirectly, or
distribute this Prospectus Supplement or the Prospectus or any other offering
material relating to the Notes, in or from any jurisdiction except under
circumstances that will result in compliance with the applicable laws and
regulations thereof and that will not impose any obligations on the Company
except as set forth in the underwriting agreement.
Purchasers of the Notes may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase in
addition to the public offering price set forth on the cover page.
The Underwriters are offering the Notes subject to prior sale and their
acceptance of the Notes from the Company. The Underwriters reserve the right to
reject any order in whole or in part.
S-20
<PAGE> 21
GENERAL INFORMATION
Application has been made to list the Notes on the Luxembourg Stock
Exchange. In connection with the listing application, the Certificate of
Incorporation and the By-Laws of the Company and a legal notice relating to the
issuance of the Notes have been deposited prior to listing with the Greffier en
Chef du Tribunal d'Arrondissement de et a Luxembourg, where copies thereof may
be obtained upon request. Copies of the above documents together with this
Prospectus Supplement, the accompanying Prospectus, the Indenture and the
Company's 1997 10-K Report and the 1998 10-Q Reports, as well as all other
documents incorporated by reference herein including future Annual Reports on
Form 10-K and Quarterly Reports on Form 10-Q, so long as the Notes are listed on
the Luxemburg Stock Exchange, will be made available for inspection, and may be
obtained free of charge, at the main office of Banque Internationale a
Luxembourg. Banque Internationale a Luxembourg will act as a contact between the
Luxembourg Stock Exchange and the Company or the holders of the Notes.
The Indenture provides that the Company, Trustee or holders of not less
than 10% in aggregate principal amount of any series of Notes then outstanding
may convene a meeting of the holders of such series of Notes to consider matters
affecting their interests. Notice of such meeting shall set forth in general
terms the action proposed to be taken at such meeting and shall be given not
less than 20 nor more than 90 days prior to the date fixed for the meeting.
Modifications and amendments to the Indenture or to the terms and conditions of
any series of Notes may be made, and future compliance therewith or past default
by the Company may be waived, either with the written consent of the holders of
at least 66 2/3% in aggregate principal amount of the Notes of such series
outstanding or by the adoption of a resolution at a meeting of holders of the
Notes of such series by at least 66 2/3% in principal amount of the Notes
represented and voting at such meeting. At any meeting of holders, the quorum
required is the presence of persons holding or representing Notes in an
aggregate principal amount sufficient to take action on the particular matter
before the meeting.
Other than as disclosed or contemplated herein or in the documents
incorporated by reference, to the best of the Company's knowledge and belief,
there has been no material adverse change in the financial position of the
Company on a consolidated basis since June 30, 1998.
Other than as disclosed or contemplated herein or in the documents
incorporated by reference, to the best of the Company's knowledge and belief,
the Company is not a party to any legal or arbitration proceedings (including
any that are pending or threatened) which may have, or have had, since December
31, 1997, a significant effect on the Company's consolidated financial position.
Resolutions relating to the issue and sale of the Notes were adopted by the
Board of Directors of the Company on September 1, 1998 and the Special Committee
thereof on October 27, 1998.
The 2003 Notes have been assigned CUSIP No. 046003JS9, Euroclear and Cedel
Bank Common Code No. 009205799 and ISIN No. US046003JS90. The 2008 Notes have
been assigned CUSIP No. 046003JT7, Euroclear and Cedel Bank Common Code No.
009205802, and ISIN No. US046003JT73. The 2018 Debentures have been assigned
CUSIP No. 046003JU4, Euroclear and Cedel Bank Common Code No. 009205829 and ISIN
No. US046003JU47.
S-21
<PAGE> 22
PROSPECTUS
[ASSOCIATES LOGO]
Debt Securities
Warrants to Purchase Debt Securities
---------------------
Associates Corporation of North America (the "Company") from time to time
may issue in one or more series its unsecured debt securities ("Debt
Securities"), which may either be senior (the "Senior Securities") or
subordinated (the "Subordinated Securities") in priority of payment, and
warrants to purchase Debt Securities (the "Warrants") (the Debt Securities and
the Warrants are collectively referred to herein as the "Securities") for
proceeds up to $12,500,000,000, or the equivalent thereof if any of the
Securities are denominated in a foreign currency or a foreign currency unit. The
Debt Securities of each series will be offered in amounts, at prices and on
terms determined at the time of sale. The Debt Securities and Warrants may be
sold for U.S. dollars, foreign currencies or foreign currency units, and the
principal of and any interest on the Debt Securities may be payable in U.S.
dollars, foreign currencies or foreign currency units. The specific designation,
priority, aggregate principal amount, the currency or currency unit for which
the Securities may be purchased, the currency or currency unit in which the
principal and any interest is payable, the rate (or method of calculation) and
time of payment of any interest, authorized denominations, maturity, offering
price, any redemption terms or other specific terms of the Securities in respect
of which this Prospectus is being delivered are set forth in the accompanying
Prospectus Supplement ("Prospectus Supplement"). With regard to the Warrants, if
any, in respect of which this Prospectus is being delivered, the Prospectus
Supplement sets forth a description of the Debt Securities for which each
Warrant is exercisable and the offering price, if any, exercise price, duration,
detachability and other terms of the Warrants.
The Securities may be sold through underwriters or dealers or may be sold
by the Company directly or through agents designated from time to time. The
names of any underwriters or agents involved in the sale of the Securities in
respect to which this Prospectus is being delivered and their compensation are
set forth in the Prospectus Supplement.
---------------------
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. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS OCTOBER 15, 1998
<PAGE> 23
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information can be inspected and copied at
the offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
500 West Madison Street, Chicago, Illinois 60661; and Seven World Trade Center,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, the Commission
maintains a Website that contains reports, and other information regarding
registrants that file electronically, such as the Company. The address of the
Commission's Website is http://www.sec.gov. Such reports and other information
concerning the Company also may be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, on which certain of
the Company's debt securities are listed. This Prospectus does not contain all
information set forth in the Registration Statement and Exhibits thereto which
the Company has filed with the Commission under the Securities Act of 1933 and
to which reference is hereby made.
The Company intends to publish annual reports with financial information
that has been examined and reported upon, with an opinion expressed, by an
independent certified public accountant. These reports will not be distributed
to holders of the Securities but will be available to them upon request.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997, its Quarterly Reports on Form 10-Q for the quarter ended March 31,
1998 and the quarter ended June 30, 1998 and its Current Reports on Form 8-K
filed as of January 7, 1998, January 20, 1998, March 3, 1998, March 25, 1998,
April 8, 1998, April 14, 1998, April 17, 1998, May 5, 1998, May 22, 1998, June
25, 1998, July 14, 1998, July 28, 1998, August 11, 1998, August 26, 1998,
September 29, 1998 and October 13, 1998, filed with the Commission pursuant to
the Securities Exchange Act of 1934, are hereby incorporated by reference. All
documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 after the date hereof and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference herein and to be a part hereof from the date of
filing such documents.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST BY SUCH PERSON, A COPY OF
ANY OR ALL OF THE DOCUMENTS DESCRIBED ABOVE, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO: ASSOCIATES CORPORATION OF NORTH
AMERICA, P.O. BOX 660237, DALLAS, TX 75266-0237, ATTENTION: SECRETARY (TEL.
972-652-4000).
2
<PAGE> 24
THE COMPANY
Associates Corporation of North America ("Associates" or the "Company"), a
Delaware corporation, is a wholly-owned subsidiary and principal U.S.-based
operating unit of Associates First Capital Corporation ("First Capital"). Prior
to April 7, 1998, First Capital was a majority indirect-owned subsidiary of Ford
Motor Company ("Ford"). On April 7, 1998, Ford completed a spin-off of its
interest in First Capital in the form of a tax-free distribution of its First
Capital shares to Ford Common and Ford Class B stockholders whereby First
Capital is no longer a subsidiary of Ford. All the outstanding stock of
Associates is owned directly or indirectly by First Capital. Unless the context
otherwise requires, reference to Associates or to the Company includes
Associates and all its subsidiaries.
The Company is a leading, diversified consumer and commercial finance
organization which provides finance, leasing and related services to individual
consumers and businesses in the United States. The Company's consumer finance
operations consist of a variety of specialized consumer financing products and
services, including home equity lending, personal lending, retail sales finance
and purchasing participations in credit card receivables originated by an
affiliate. The Company's commercial finance operations primarily provide retail
financing, leasing and wholesale financing for heavy-duty and medium-duty trucks
and truck trailers, construction, material handling and other industrial
equipment, manufactured housing and auto fleet leasing and other commercial
products and services. As part of its consumer finance and commercial finance
activities, the Company makes available to its customers credit-related and
other insurance products.
At December 31, 1997, Associates had 1,580 branch offices in the United
States and Puerto Rico. The principal executive offices of the Company are
located at 250 East Carpenter Freeway, Irving, TX 75062-2729 and its mailing
address is P.O. Box 660237, Dallas, TX 75266-0237 (tel. 972-652-4000).
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of Associates for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31 SIX MONTHS
-------------------------------- ENDED
1993 1994 1995 1996 1997 JUNE 30, 1998
---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
1.64 1.64 1.56 1.59 1.56 1.52
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, the term
"earnings" represents 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.
APPLICATION OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, the net proceeds from the sale of the Securities will be added
to the general funds of the Company to be applied to fund investments in, or
extensions of credit to, its subsidiaries; to reduce other outstanding
indebtedness; to fund acquisitions by the Company and its subsidiaries of other
companies or finance receivables; or for such other purposes as may be set forth
in the Prospectus Supplement. Pending such application, such net proceeds may be
temporarily invested or applied to the reduction of short-term debt. The Company
expects from time to time to continue to incur short-term and long-term debt and
to effect other financings, the amounts of which cannot now be determined.
3
<PAGE> 25
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will constitute either senior or subordinated debt of
the Company. The Debt Securities will be issued under one or more separate
indentures described below for Senior Securities (each, a "Senior Indenture") or
for Subordinated Securities (each, a "Subordinated Indenture"), in each case
between the Company and a banking institution organized under the laws of the
United States of America or of any State thereof (each, a "Trustee"). The Senior
Indentures and the Subordinated Indentures are hereinafter collectively referred
to as the "Indentures" and individually as an "Indenture". The following summary
of provisions of the Indentures does not purport to be complete and is qualified
in its entirety by reference to the applicable Indenture, which is filed as an
exhibit to the Registration Statement. All article and section references
appearing herein are to articles and sections of the applicable Indenture, and
all capitalized terms have the meanings specified in such Indenture.
None of the Indentures limits the amount of Debt Securities which may be
issued thereunder, and each Indenture provides that Debt Securities may be
issued thereunder up to the aggregate principal amount authorized from time to
time by the Company and may be denominated in any currency or currency unit
designated by the Company. The Indentures do not contain any covenant or other
provision that is specifically intended to afford any Holder special protection
in the event of a highly leveraged transaction. Reference is made to the
Prospectus Supplement which accompanies this Prospectus for the following terms
and other information to the extent applicable with respect to the Debt
Securities being offered thereby: (1) the designation, aggregate principal
amount, authorized denominations and priority of such Debt Securities; (2) the
percentage of the principal amount at which such Debt Securities will be issued;
(3) the currency, currencies or currency units for which the Debt Securities may
be purchased and the currency, currencies or currency units in which the
principal of and any interest on such Debt Securities may be payable; (4) the
date on which such Debt Securities will mature; (5) the rate per annum at which
such Debt Securities will bear interest, if any, or the method of determination
of such rate; (6) the dates on which such interest, if any, will be payable; (7)
whether such Debt Securities are to be issued in whole or in part in the form of
one or more global securities (each a "Global Security") and, if so, the
identity of a depositary (the "Depositary") for such Global Security or
Securities; and (8) any redemption or other specific terms with respect to such
Debt Securities.
If any of the Securities are sold for foreign currencies or foreign
currency units or if the principal of or any interest on any series of Debt
Securities is payable in foreign currencies or foreign currency units, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such issue of Securities and such currencies or currency units
will be set forth in the Prospectus Supplement relating thereto.
The Debt Securities may be issued in fully registered form without coupons
("Fully Registered Securities"), or in a form registered as to principal only
with coupons or in bearer form with coupons. Unless otherwise specified in the
Prospectus Supplement, the Debt Securities will be only Fully Registered
Securities (sec.sec.3.01, 3.02). In addition, Debt Securities of a series may be
issuable in the form of one or more Global Securities, which will be denominated
in an amount equal to all or a portion of the aggregate principal amount of such
Debt Securities (sec.2.04). See "Global Securities" below.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable to any such series will be
described in the Prospectus Supplement relating thereto.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, the Depositary identified in the Prospectus Supplement relating to such
series. Unless and until it is exchanged in whole or in part for Debt Securities
in individually certificated form, a Global Security may not be transferred
except as a whole to a nominee of the Depositary
4
<PAGE> 26
for such Global Security, or by a nominee of such Depositary to such Depositary,
or to a successor of such Depositary or a nominee of such successor (sec.2.04).
The specific terms of the depositary arrangement with respect to any series
of Debt Securities and the rights of and limitations on owners of beneficial
interests in a Global Security representing all or a portion of a series of Debt
Securities will be described in the Prospectus Supplement relating to such
series.
RESTRICTIVE PROVISIONS
None of the Indentures limits the amount of other debt which may be issued
by the Company or the amount of dividends or other payments which may be paid
with respect to, or the redemption or acquisition of, its equity securities by
the Company or its subsidiaries, but each Indenture contains a covenant that
neither the Company nor any Finance or Insurance Subsidiary will create or incur
any mortgage, pledge, or charge of any kind on any of its properties, except
for: intercompany mortgages or pledges from subsidiary to parent corporation or
to any other Finance or Insurance Subsidiary; purchase money liens or leases;
acquisitions of subsidiaries, the physical properties or assets of which are
subject to liens; liens created in the ordinary course of business by
subsidiaries for money borrowed if such subsidiaries operate in foreign
countries or prior to becoming a subsidiary had borrowed on a secured basis;
sale and leaseback arrangements upon any real property; renewals or refundings
of any of the foregoing; and certain other minor exceptions. Each Indenture also
contains a covenant restricting certain transactions by the Company or its
Subsidiaries with any Controlling Person or Controlling Person Subsidiary
(sec.6.02).
A restriction contained in the Company's 6% Senior Notes due March 15, 1999
generally limits payments of cash dividends on the Company's common stock in any
year to not more than 50% of consolidated net earnings for such year, plus
increases in contributed capital and extraordinary gains. This restriction shall
not apply to any company into which the Company shall be merged, with which the
Company shall be consolidated or to which substantially all the assets of the
Company shall be transferred; provided, that such company shall have satisfied
all the requirements of the indenture under which such 6% Senior Notes were
issued. Unless otherwise set forth in the Prospectus Supplement relating to any
series of Debt Securities, no such restriction will be contained in any series
of Debt Securities issued under the Indentures.
MODIFICATION OF INDENTURES
Each Indenture, the rights and obligations of the Company and the rights of
the Holders may be modified with respect to one or more series of Debt
Securities issued under such Indenture with the consent of the Holders of not
less than 66 2/3% in principal amount of the Outstanding Debt Securities of each
such series affected by the modification or amendment. No modification of the
terms of payment of principal or interest, and no modification reducing the
percentage required for modification is effective against any Holder without his
consent. No modification of the Senior Indentures subordinating the indebtedness
evidenced by any series of Senior Securities issued thereunder to any other
indebtedness of the Company is effective against any Holder of a Senior Security
issued thereunder without his consent, and no modification of the Subordinated
Indenture subordinating the indebtedness evidenced by any series of Subordinated
Securities issued thereunder to any indebtedness of the Company other than
Superior Indebtedness is effective against any Holder of Subordinated Securities
without his consent. For the purpose of these provisions, a holder of an
unexpired Warrant shall be deemed to be the Holder of the principal amount of
Debt Securities issuable upon exercise of such Warrant (sec.6.03, sec.12.01).
EVENTS OF DEFAULT
Each Indenture provides that the following are Events of Default with
respect to any series of Debt Securities issued thereunder: default in the
payment of the principal of any Debt Security of such series when and as the
same shall be due and payable; default in making a sinking fund payment, if any,
when and as the same shall be due and payable by the terms of the Debt
Securities of such series; default for 30 days in the payment of any installment
of interest on any Debt Security of such series; default for 60 days after
notice in the performance of any other covenant in respect of the Debt
Securities of such series contained in the Indenture; certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Company or its property; default for 30 days in the
payment of any installment of
5
<PAGE> 27
interest on any evidence of indebtedness (including any other series of Debt
Securities issued under the same Indenture) issued, assumed or guaranteed by the
Company or default in the payment of any principal of any such evidence of
indebtedness; and any other Event of Default provided in the applicable Board
Resolution or supplemental indenture under which such series of Debt Securities
is issued (sec.8.01). An Event of Default with respect to a particular series of
Debt Securities issued under an Indenture does not necessarily constitute an
Event of Default with respect to any other series of Debt Securities issued
under such Indenture. The appropriate Trustee may withhold notice to the Holders
of any series of Debt Securities of any default with respect to such series
(except in the payment of principal or interest) if it considers such
withholding in the interests of such Holders.
If an Event of Default with respect to any series of Debt Securities shall
have occurred and be continuing, the appropriate Trustee or the Holders of not
less than 25% in aggregate principal amount of the Debt Securities of such
series may declare the principal, or in the case of discounted Debt Securities,
such portion thereof as may be described in the Prospectus Supplement
accompanying this Prospectus, of all the Debt Securities of such series to be
due and payable immediately (sec.8.01).
Within four months after the close of each fiscal year, the Company must
file with each Trustee a certificate, signed by specified officers, stating
whether or not such officers have knowledge of any default, and, if so,
specifying each such default and the nature thereof (sec.6.02).
Subject to provisions relating to its duties in case of default, a Trustee
shall be under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request, order or direction of any Holders, unless
such Holders shall have offered to such Trustee reasonable indemnity (sec.9.03).
Subject to such provisions for indemnification, the Holders of a majority in
principal amount of the Debt Securities of any series may direct the time,
method and place of conducting any proceeding for any remedy available to the
appropriate Trustee, or exercising any trust or power conferred upon such
Trustee, with respect to the Debt Securities of such series (sec.8.06).
PAYMENT AND TRANSFER
Principal of, premium, if any, and interest, if any, on Fully Registered
Securities are to be payable at the Corporate Trust Office of the Trustee under
the applicable Indenture or any other office maintained by the Company for such
purposes, provided that payment of interest, if any, will be made, unless
otherwise provided in the applicable Prospectus Supplement, by check mailed to
the persons in whose names such Securities are registered at the close of
business on the day or days specified in the Prospectus Supplement accompanying
this Prospectus (sec.sec.3.08, 3.11). The principal of, premium, if any, and
interest, if any, on Debt Securities in other forms will be payable in such
manner and at such place or places as may be designated by the Company and
specified in the applicable Prospectus Supplement (sec.3.11).
Fully Registered Securities may be transferred or exchanged at the
Corporate Trust Office of the Trustee under the applicable Indenture or at any
other office or agency maintained by the Company for such purposes, subject to
the limitations in the applicable Indenture, without the payment of any service
charge except for any tax or governmental charge incidental thereto. Provisions
with respect to the transfer and exchange of Debt Securities in other forms will
be set forth in the applicable Prospectus Supplement (sec.3.05).
SENIOR SECURITIES
SUPERIOR INDEBTEDNESS
The Senior Securities will constitute part of the Superior Indebtedness of
the Company and will rank pari passu with all outstanding senior debt. The
outstanding Subordinated Indebtedness and Capital Indebtedness have been
subordinated, as to payment of principal, premium, if any, and interest, if any,
to all other liabilities of the Company, including the Senior Securities.
6
<PAGE> 28
SUBORDINATED SECURITIES
SUBORDINATION
The Subordinated Securities will be subordinate and junior in right of
payment in all respects to all Superior Indebtedness of the Company, whether
outstanding at the date of the Subordinated Indenture or incurred after such
date. The term "Superior Indebtedness" is defined to mean (i) all obligations of
the Company which in accordance with generally accepted accounting principles
are classified as liabilities on the Company's balance sheet and (ii) guaranties
of, endorsements and other contingent obligations in respect of, or to purchase
or otherwise acquire, indebtedness of others, except other Subordinated
Indebtedness and Capital Indebtedness (sec.15.01 of the Subordinated Indenture).
"Subordinated Indebtedness" is defined to mean all Indebtedness of the Company
which is subordinate and junior in right of payment to Superior Indebtedness,
but does not include "Capital Indebtedness", which is defined to be Indebtedness
subordinate and junior to Subordinated Indebtedness and Superior Indebtedness
(sec.1.01 of the Subordinated Indenture). At June 30, 1998, Superior
Indebtedness aggregated approximately $45.5 billion. The amount of additional
Superior Indebtedness which the Company may issue is not subject to any
limitation.
Upon any distribution of assets of the Company in connection with any
dissolution, winding up, liquidation or reorganization of the Company, the
holders of all Superior Indebtedness will first be entitled to receive payment
in full of principal of and interest, if any, on such Superior Indebtedness
before the Holders of Subordinated Securities are entitled to receive any
payment on Subordinated Securities. In the event that any Subordinated Security
is declared due and payable because of the occurrence of an Event of Default,
under circumstances when the provisions of the foregoing sentence are not
applicable, the Trustee under the Subordinated Indenture or the Holders of
Subordinated Securities shall be entitled to payment only after there shall
first have been paid in full the Superior Indebtedness outstanding at the time
such Subordinated Security so becomes due and payable because of such Event of
Default (Article Fifteen of the Subordinated Indenture).
CONCERNING THE TRUSTEES
Business and other relationships (including other trusteeships) between the
Company and its affiliates and each Trustee under any Indenture pursuant to
which any of the Debt Securities to which the Prospectus Supplement accompanying
this Prospectus are described in such Prospectus Supplement.
In the event Debt Securities are issued pursuant to an Indenture with a
Trustee which is also a Trustee for any subordinate or superior class of Debt
Securities pursuant to an Indenture, the occurrence of any default under either
Indenture could create a conflicting interest for the respective Trustee under
the Trust Indenture Act of 1939, as amended (the "1939 Act"). If such default
has not been cured or waived within 90 days after such Trustee has or acquires a
conflicting interest, such Trustee generally is required by the 1939 Act to
eliminate such conflicting interest or resign as Trustee with respect to the
Debt Securities issued under one such Indenture. In the event of the Trustee's
resignation, the Company shall promptly appoint a successor trustee with respect
to the affected Debt Securities.
DESCRIPTION OF WARRANTS
The following statements with respect to the Warrants are summaries of, and
subject to, the detailed provisions of a Warrant Agreement (the "Warrant
Agreement") to be entered into by the Company and a warrant agent to be selected
at the time of issue (the "Warrant Agent"), a form of which is filed as an
exhibit to the Registration Statement.
GENERAL
The Warrants, evidenced by Warrant certificates (the "Warrant
Certificates"), may be issued under the Warrant Agreement independently or
together with any Debt Securities offered by any Prospectus Supplement and may
be attached to or separate from such Debt Securities. If Warrants are offered,
the Prospectus
7
<PAGE> 29
Supplement will describe the terms of the Warrants, including the following: (i)
the offering price, if any; (ii) the designation, aggregate principal amount,
and terms of the Debt Securities purchasable upon exercise of the Warrants;
(iii) if applicable, the designation and terms of the Debt Securities with which
the Warrants are issued and the number of Warrants issued with each such Debt
Security; (iv) if applicable, the date on and after which the Warrants and the
related Debt Securities will be separately transferable; (v) the principal
amount of Debt Securities purchasable upon exercise of one Warrant and the price
at which such principal amount of Debt Securities may be purchased upon such
exercise; (vi) the date on which the right to exercise the Warrants shall
commence and the date on which such right shall expire; (vii) federal income tax
consequences; (viii) whether the Warrants represented by the Warrant
Certificates will be issued in registered or bearer form; and (ix) any other
terms of the Warrants.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations and may (if in registered form) be presented for
registration of transfer at the corporate trust office of the Warrant Agent or
any Co-Warrant Agent, which will be listed in the Prospectus Supplement, or at
such other office as may be set forth therein. Warrantholders do not have any of
the rights of Holders of Debt Securities (except to the extent that the consent
of Warrantholders may be required for certain modifications of the terms of the
Indenture and the series of Debt Securities issuable upon exercise of the
Warrants) and are not entitled to payments of principal of and interest, if any,
on such Debt Securities.
EXERCISE OF WARRANTS TO PURCHASE DEBT SECURITIES
Warrants may be exercised by surrendering the Warrant Certificate at the
corporate trust office of the Warrant Agent or at the corporate trust office of
the Co-Warrant Agent, if any, with the form of election to purchase on the
reverse side of the Warrant Certificate properly completed and executed, and by
payment in full of the exercise price, as set forth in the Prospectus
Supplement. Upon the exercise of Warrants, the Warrant Agent or Co-Warrant
Agent, if any, will, as soon as practicable, deliver the Debt Securities in
authorized denominations in accordance with the instructions of the exercising
Warrantholder and at the sole cost and risk of such holder. If less than all of
the Warrants evidenced by the Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any one or more of the following
ways from time to time: (i) through underwriters or dealers; (ii) directly to
one or more purchasers; or (iii) through agents. The Prospectus Supplement with
respect to the Securities being offered thereby sets forth the terms of the
offering of such Securities, including the name or names of any underwriters,
the purchase price of such Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers, and any securities exchange on which
such Securities may be listed. Only underwriters so named in the Prospectus
Supplement are deemed to be underwriters in connection with the Securities
offered thereby.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase such Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all the Securities of the series offered by the Company's Prospectus Supplement
if any of such Securities are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as agents
for the Company. Any remarketing firm will be identified and the terms of its
agreement, if any, with the Company
8
<PAGE> 30
and its compensation will be described in the Prospectus Supplement. Remarketing
firms may be deemed to be underwriters in connection with the Securities
remarketed thereby.
Securities may also be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offering
and sale of the Securities in respect of which this Prospectus is delivered is
named, and any commissions payable by the Company to such agent are set forth,
in the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent is acting on a best efforts basis for the period of
its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Securities providing for payment and delivery on a future
date specified in the Prospectus Supplement. There may be limitations on the
minimum amount which may be purchased by any such institutional investor or on
the portion of the aggregate principal amount of the particular Securities which
may be sold pursuant to such arrangements. Institutional investors to which such
offers may be made, when authorized, include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and such other institutions as may be approved by the
Company. The obligations of any such purchasers pursuant to such delayed
delivery and payment arrangements will not be subject to any conditions except
(i) the purchase by an institution of the particular Securities shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject, and (ii) if the particular
Securities are being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of such Securities less the principal
amount thereof covered by such arrangements. Underwriters will not have any
responsibility in respect of the validity of such arrangements or the
performance of the Company or such institutional investors thereunder.
If any underwriter or any selling group member intends to engage in
stabilizing, syndicate short covering transactions, penalty bids or any other
transaction in connection with the offering of Securities that may stabilize,
maintain, or otherwise affect the price of such Securities, such intention and a
description of such transactions will be described in the Prospectus Supplement.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution with
respect to payments which the agents or underwriters may be required to make in
respect thereof. Agents and underwriters may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
LEGAL OPINIONS
The legality of the Securities will be passed upon for the Company by
Timothy M. Hayes or Frederic C. Liskow, each an Assistant General Counsel, 250
East Carpenter Freeway, Irving, TX 75062-2729, and for any 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 and Mr. Liskow own shares of Class A Common Stock of the
Company's parent, First Capital, and have options to purchase additional shares
of such Class A Common Stock.
EXPERTS
The consolidated balance sheets as of December 31, 1997 and 1996 and the
consolidated statements of earnings, changes in stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 1997,
incorporated by reference in this Prospectus, have been incorporated herein in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in accounting and auditing.
9
<PAGE> 31
THE COMPANY
ASSOCIATES CORPORATION OF NORTH AMERICA
250 East Carpenter Freeway
Irving, Texas 75062-2729
TRUSTEE AND PAYING AGENT
THE CHASE MANHATTAN BANK
One Chase Plaza
New York, New York
LUXEMBOURG PAYING AGENT
CHASE MANHATTAN BANK LUXEMBOURG S.A.
5 Rue Plaetis
L-2338
Luxembourg
LEGAL ADVISORS
<TABLE>
<S> <C>
To the Underwriters To the Company
as to United States Law as to United States Law
LEBOEUF, LAMB, GREENE & MACRAE, L.L.P. FREDERIC C. LISKOW, ESQ.
125 West 55th Street Vice President and Assistant General Counsel
New York, New York 10019
</TABLE>
AUDITORS
To the Company
PRICEWATERHOUSECOOPERS LLP
1999 Bryan Street, Suite 3000
Dallas, Texas 75201
LISTING AGENT
BANQUE INTERNATIONALE A LUXEMBOURG
69 route d'Esch
L-1470
Luxembourg
<PAGE> 32
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Documents Incorporated by Reference... S-2
The Company........................... S-3
Summary Financial Information......... S-6
Capitalization........................ S-8
Application of Proceeds............... S-9
Description of the Notes.............. S-9
Certain United States Federal Income
Tax Considerations.................. S-16
Underwriting.......................... S-19
General Information................... S-21
PROSPECTUS
Available Information................. 2
Documents Incorporated by Reference... 2
The Company........................... 3
Application of Proceeds............... 3
Description of Debt Securities........ 4
Description of Warrants............... 7
Plan of Distribution.................. 8
Legal Opinions........................ 9
Experts............................... 9
</TABLE>
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$4,800,000,000
[ASSOCIATES LOGO]
$2,300,000,000
5.75% SENIOR NOTES
DUE NOVEMBER 1, 2003
$1,500,000,000
6.25% SENIOR NOTES
DUE NOVEMBER 1, 2008
$1,000,000,000
6.95% SENIOR DEBENTURES
DUE NOVEMBER 1, 2018
PROSPECTUS SUPPLEMENT
BEAR, STEARNS & CO. INC.
WARBURG DILLON READ LLC
CHASE SECURITIES INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
ABN AMRO
BARCLAYS CAPITAL
COMMERZBANK AKTIENGESELLSCHAFT
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANK
DONALDSON, LUFKIN & JENRETTE
DRESDNER BANK AG LONDON BRANCH
GOLDMAN, SACHS & CO.
HSBC MARKETS
SG
WESTDEUTSCHE LANDESBANK GIROZENTRALE
OCTOBER 27, 1998
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