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Filed Pursuant to Rule 424(b)(2)
File No. 333-62861
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED OCTOBER 15, 1998)
$1,000,000,000
[ASSOCIATES LOGO]
FLOATING RATE SENIOR NOTES DUE MARCH 20, 2000
------------------------
Interest on the Floating Rate Senior Notes due March 20, 2000 (the "Notes")
will be payable on the twentieth day of each month (each an "Interest Payment
Date"), commencing on April 20, 1999. If any Interest Payment Date would
otherwise be a day that is not a Business Day, such Interest Payment Date will
be postponed to the next day that is a Business Day. The rate of interest on the
Notes will be reset monthly, and the rate of interest in effect for each
Interest Period will be the One-Month LIBOR Rate minus 0.12%. The Notes are not
redeemable at any time prior to maturity.
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.
The Underwriter has agreed to purchase the Notes from the Company at
99.996% of their principal amount ($999,960,000 total proceeds to the Company,
before deducting expenses payable by the Company estimated at $600,000), subject
to the terms and conditions in the Underwriting Agreement.
The Underwriter proposes to offer the Notes from time to time for sale in
negotiated transactions at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. For
information about underwriting discounts or commissions, see "Underwriting."
------------------------
The Notes will be ready for delivery in book-entry form only, through the
facilities of The Depository Trust Company on or about March 19, 1999, against
payment in immediately available funds.
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MERRILL LYNCH & CO.
------------------------
The date of this prospectus supplement is March 16, 1999.
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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.
SUMMARY FINANCIAL INFORMATION
The following summary of certain financial information of the Company and
its consolidated subsidiaries has been derived principally from information
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, available as described 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 YEAR ENDED DECEMBER 31
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1994 1995 1996 1997 1998
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(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges..................................... $3,866.7 $4,805.3 $5,580.3 $6,428.5 $5,841.5
Insurance premiums.................................. 293.5 325.1 354.8 370.1 383.9
Investment and other income......................... 227.7 254.0 286.3 352.5 873.9
-------- -------- -------- -------- --------
4,387.9 5,384.4 6,221.4 7,151.1 7,099.3
Expenses --
Interest expense.................................... 1,509.7 1,979.8 2,206.7 2,543.9 2,842.2
Operating expenses.................................. 1,191.6 1,417.8 1,603.3 1,842.5 1,660.7
Provision for losses on finance receivables......... 569.9 729.7 963.4 1,195.6 949.4
Insurance benefits paid or provided................. 144.1 135.7 142.9 142.1 144.0
-------- -------- -------- -------- --------
3,415.3 4,263.0 4,916.3 5,724.1 5,596.3
-------- -------- -------- -------- --------
Earnings Before Provision for Income Taxes............ 972.6 1,121.4 1,305.1 1,427.0 1,503.0
Provision for Income Taxes............................ 369.1 413.3 482.0 524.5 551.0
-------- -------- -------- -------- --------
Net Earnings.......................................... $ 603.5 $ 708.1 $ 823.1 $ 902.5 $ 952.0
======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges(a)................. 1.64 1.56 1.59 1.56 1.53
--- --- --- --- ---
--- --- --- --- ---
</TABLE>
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(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.
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SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31 DECEMBER 31
1997 1998
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(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents................................. $ 294.8 $ 2,619.7
Investments in Debt and Equity Securities
Bonds and Notes........................................ 1,022.5 1,845.1
Stocks................................................. 131.0 20.8
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Total Investments in Debt and Equity Securities... 1,153.5 1,865.9
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Finance Receivables, net of unearned finance income....... 47,854.5 46,038.5
Allowance for Losses on Finance Receivables............... (1,661.9) (1,378.9)
Insurance Policy and Claims Reserves...................... (762.4) (763.8)
Other Assets.............................................. 3,652.6 8,195.9
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Total Assets...................................... $50,531.1 $56,577.3
========= =========
Liabilities and Stockholders' Equity:
Notes Payable, unsecured short-term
Commercial paper....................................... $17,184.5 $15,357.2
Bank loans............................................. 1,202.1 1,070.7
Long-Term Debt, unsecured due within one year
Senior................................................. 4,190.5 6,547.9
Subordinated........................................... -- --
Capital................................................ 0.1 0.1
Accounts Payable and Accruals............................. 960.4 1,187.7
Long-Term Debt, unsecured
Senior................................................. 20,519.5 25,232.3
Subordinated........................................... 425.0 425.0
Capital................................................ 0.3 0.2
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Total Long-Term Debt.............................. 20,944.8 25,657.5
Stockholders' Equity...................................... 6,048.7 6,756.2
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Total Liabilities and Stockholders' Equity........ $50,531.1 $56,577.3
========= =========
</TABLE>
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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 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 $1,000,000,000;
- will mature and become due and payable, at 100% of their principal amount
together with any accrued and unpaid interest, on March 20, 2000; and
- will not be redeemable by the Company prior to maturity.
INTEREST
The rate of interest for each Interest Period (as defined below) is the
One-Month LIBOR Rate minus 0.12%. Such rate of interest shall be determined for
each Interest Period on the second London and New York Banking Day (as defined
in the ISDA Definitions, which is defined below) preceding the relevant Reset
Date (as defined below). The "One-Month LIBOR Rate" for an Interest Period means
a rate equal to the Floating Rate (as defined in the ISDA Definitions) that
would be determined by the LIBOR Calculation Agent (as defined below) under an
interest rate swap transaction if the LIBOR Calculation Agent were acting as
Calculation Agent (as defined in the ISDA Definitions) for that swap transaction
under the terms of an agreement incorporating the ISDA Definitions and under
which:
(i) the Floating Rate Option (as defined in the ISDA Definitions) is
USD-LIBOR-BBA;
(ii) the Designated Maturity (as defined in the ISDA Definitions) is
one month; and
(iii) the Reset Date (as defined in the ISDA Definitions) is the first
day of that Interest Period.
Interest on the Notes will be paid to the persons in whose names the Notes
are registered at the close of business on the Business Day immediately
preceding any Interest Payment Date; provided, however, that interest payable at
maturity will be payable to the persons to whom the principal of such Notes
shall be payable.
Interest payments for the Notes shall be the amount of interest accrued
from the date of issue or from the last date to which interest has been paid to,
but excluding, the Interest Payment Date or maturity, as the case may be.
Interest is computed by dividing the actual number of days in the Interest
Period by 360.
"Business Day" means any day that is not a Saturday or Sunday, and that, in
The City of New York, is not a day on which banking institutions are generally
authorized or obligated by law to close.
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"Interest Period" means (i) the period from and including March 19, 1999,
to but excluding the first Interest Payment Date, and (ii) each successive
period from and including an Interest Payment Date, to but excluding the next
Interest Payment Date or at maturity, as the case may be.
"ISDA Definitions" means the 1991 ISDA Definitions, as amended and updated
as of the date hereof, published by the International Swaps and Derivatives
Association, Inc.
"USD-LIBOR-BBA" means that the rate for a Reset Date will be the rate for
deposits in U.S. Dollars for a period of the Designated Maturity which appears
on the Telerate Page 3750 as of 11:00 a.m., London time, on the day that is two
London and New York Banking Days preceding that Reset Date. If such rate does
not appear on the Telerate Page 3750, the rate for that Reset Date will be
determined as if the parties had specified "USD-LIBOR-Reference Banks" as the
applicable Floating Rate Option. "USD-LIBOR-Reference Banks" means that the rate
for a Reset Date will be determined on the basis of the rates at which deposits
in U.S. Dollars are offered by the Reference Banks (as defined in the ISDA
Definitions) at approximately 11:00 a.m., London time, on the day that is two
London and New York Banking Days preceding that Reset Date to prime banks in the
London interbank market for a period of the Designated Maturity commencing on
that Reset Date and in a Representative Amount (as defined in the ISDA
Definitions). The LIBOR Calculation Agent will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that Reset Date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that Reset Date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the LIBOR Calculation Agent,
at approximately 11:00 a.m., New York City time, on that Reset Date for loans in
U.S. Dollars to leading European banks for a period of the Designated Maturity
commencing on that Reset Date and in a Representative Amount.
Pursuant to the Notes, Chase shall be the initial "LIBOR Calculation Agent"
with respect to the Notes. The LIBOR Calculation Agent will notify the Company
and the Trustee of each determination of the interest rate applicable to the
Notes promptly after such determination is made. The Trustee will, upon the
request of the holder of any Note, provide the interest rate then in effect and,
if different, the interest rate which will become effective as a result of the
determination made with respect to the most recent Reset Date with respect to
such Note. The Trustee will not be responsible for determining the interest rate
applicable to any Note.
BOOK-ENTRY SYSTEM
Upon issuance, the Notes will be represented by Global Securities
registered in the name of Cede & Co., as nominee of The Depository Trust
Company, which will act as the depositary for the Notes (the "Depositary"). The
Depositary has advised the Company as follows: 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 ("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" 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
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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 the 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 actual purchaser of a Note
(a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. 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 or Indirect Participant
through which the 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 Global
Securities, except in the event that use of the book-entry system for the Notes
is discontinued.
To facilitate subsequent transfers, all Notes deposited by Participants
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 the 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.
As long as the Notes are held by the Depositary or its nominee and the
Depositary continues to make its same-day funds settlement system available to
the Company, all payments of principal of and interest on the Notes will be made
by the Company in immediately available funds to the Depositary. The Company has
been advised that 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, Trustee or the Company, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to the Depositary is the responsibility of the
Company or 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 and Indirect
Participants.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing house or next-day funds. In contrast, the Notes
will trade in the Depositary's Same-Day Funds Settlement system. Accordingly,
the Depositary will require that secondary trading activity in the Notes settle
in immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Notes.
The Company expects that 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. In addition,
neither the Depositary nor Cede & Co. will consent or vote with respect to the
Notes; the Company has been advised that the Depositary's usual procedure is to
mail an omnibus proxy to the Company as soon as possible after the record date
with respect to such consent or vote. The omnibus proxy would assign Cede &
Co.'s consenting or voting rights to those
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Direct Participants to whose accounts the Notes are credited on such record date
(identified in a listing attached to the omnibus proxy).
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 Securities
representing such Notes. In addition, the Company may at any time and in its
sole discretion determine not to have the Notes represented by Global Securities
and, in such event, will issue individual definitive Notes in exchange for all
the Global Securities representing the Notes. Individual definitive Notes so
issued will be issued in denominations of $1,000 and any larger amount that is
an integral multiple of $1,000 and registered in such names as the Depositary
shall direct.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
CONCERNING THE TRUSTEE
Chase is the trustee for various 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.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated March 16, 1999, the Company has agreed to sell to Merrill Lynch, Pierce,
Fenner & Smith Incorporated (the "Underwriter"), and the Underwriter has agreed
to purchase, the entire principal amount of the Notes.
The Underwriting Agreement provides that the obligations of the Underwriter
are subject to certain conditions precedent and that the Underwriter will be
obligated to purchase all of the Notes if any are purchased.
The Underwriter has advised the Company that it proposes to offer the Notes
from time to time for sale in one or more negotiated transactions, or otherwise,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Underwriter may effect
such transactions by selling the Notes to or through dealers, and such dealers
may receive compensation in the form of underwriting discounts, concessions or
commissions from the Underwriter and/or the purchasers of the Notes for whom
they may act as agent. The Underwriter and any dealers that participate with the
Underwriter in the distribution of the Notes may be deemed to be underwriters,
and any discounts or commissions received by them and any profit on the resale
of the Notes by them may be deemed to be underwriting discounts or commissions,
under the Securities Act of 1933, as amended.
The Company has been advised by the Underwriter that it currently intends
to make a market in the Notes, but is not obligated to do so and may discontinue
such market making at any time without notice. No assurance can be given as to
the liquidity of any trading market for the Notes.
The Underwriting Agreement provides that the Company will indemnify the
Underwriter against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriter
may be required to make in respect thereof.
The Underwriter is offering the Notes subject to prior sale and its
acceptance of the Notes from the Company. The Underwriter reserves the right to
reject any order in whole or in part.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C>
Summary Financial Information........... S-2
Description of the Notes................ S-4
Underwriting............................ S-7
PROSPECTUS
Available Information................... 2
Documents Incorporated by Reference..... 2
The Company............................. 3
Application of Proceeds................. 3
Description of Debt Securities.......... 4
Description of Warrants................. 8
Plan of Distribution.................... 9
Legal Opinions.......................... 10
Experts................................. 10
</TABLE>
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$1,000,000,000
[ASSOCIATES CORP. OF NORTH AMERICA LOGO]
FLOATING RATE SENIOR NOTES DUE
MARCH 20, 2000
----------------------------------
PROSPECTUS SUPPLEMENT
----------------------------------
MERRILL LYNCH & CO.
MARCH 16, 1999
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