<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-81579
PROSPECTUS SUPPLEMENT
(To Prospectus dated July 8, 1999)
[ASSOCIATES LOGO]
$1,000,000,000
Floating Rate Senior Notes due June 15, 2004
Interest payable March 15, June 15, September 15 and December 15
ISSUE PRICE: 100%
Interest on the Floating Rate Senior Notes due June 15, 2004 will be payable
quarterly on the fifteenth day of March, June, September and December,
commencing on September 15, 2000. 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 quarterly, and the rate of interest in effect for each
Interest Period will be the Three-Month LIBOR Rate plus, from June 15, 2001, the
applicable spread described in this prospectus supplement.
The holder of each Note may irrevocably elect to have all or any portion of that
Note which is a multiple of $1,000 repaid on June 15, 2001 and every June 15
prior to maturity at its principal amount, together with interest payable to the
date of repayment, by giving notice as described in this prospectus supplement.
The Notes are not redeemable by the Company at any time prior to maturity.
Neither the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement or the prospectus. Any representation to
the contrary is a criminal offense.
<TABLE>
<CAPTION>
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PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS COMPANY(1)
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<S> <C> <C> <C>
Per Note 100% .18% 99.82%
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Total $1,000,000,000 $1,800,000 $998,200,000
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from June 27, 2000.
It is expected that the Notes will be delivered in book-entry form only through
the facilities of The Depository Trust Company against payment in immediately
available funds in New York, New York on June 27, 2000.
J.P. MORGAN & CO.
June 22, 2000
<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.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Summary Financial Information............................... S-3
Description of the Notes.................................... S-5
Underwriting................................................ S-9
PROSPECTUS
About This Prospectus....................................... 2
Where You Can Find More Information......................... 2
Incorporation of Information We File with the SEC........... 3
Associates Corporation of North America..................... 3
Ratio of Earnings to Fixed Charges.......................... 4
Application of Proceeds..................................... 5
Description of Debt Securities.............................. 5
Description of Warrants..................................... 11
Plan of Distribution........................................ 12
Legal Opinions.............................................. 14
Experts..................................................... 14
</TABLE>
S-2
<PAGE> 3
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, 1999, and its Quarterly Report on Form 10-Q for the three months
ended March 31, 2000, available as described under "Where You Can Find More
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 THREE
MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31 MARCH 31
---------------------------------------------------- -------------------
1995 1996 1997 1998 1999 1999 2000
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges................. $4,805.3 $5,580.3 $6,428.5 $5,841.5 $5,911.2 $1,517.5 $1,447.2
Insurance premiums.............. 325.1 354.8 370.1 383.9 371.3 95.2 104.2
Investment and other income..... 254.0 286.3 352.5 931.4 1,246.3 249.1 307.2
-------- -------- -------- -------- -------- -------- --------
5,384.4 6,221.4 7,151.1 7,156.8 7,528.8 1,861.8 1,858.6
Expenses --
Interest expense................ 1,979.8 2,209.4 2,550.8 2,862.8 2,948.0 720.3 743.1
Operating expenses.............. 1,417.8 1,603.3 1,842.5 1,663.4 1,768.8 461.6 440.0
Provision for losses on finance
receivables................... 729.7 963.4 1,195.6 949.4 943.2 236.6 223.5
Insurance benefits paid or
provided...................... 135.7 142.9 142.1 144.0 148.4 36.6 43.0
-------- -------- -------- -------- -------- -------- --------
4,263.0 4,919.0 5,731.0 5,619.6 5,808.4 1,455.1 1,449.6
-------- -------- -------- -------- -------- -------- --------
Earnings Before Provision for
Income Taxes.................... 1,121.4 1,302.4 1,420.1 1,537.2 1,720.4 406.7 409.0
Provision for Income Taxes........ 413.3 481.0 522.0 563.0 615.9 145.9 146.6
-------- -------- -------- -------- -------- -------- --------
Net Earnings...................... $ 708.1 $ 821.4 $ 898.1 $ 974.2 $1,104.5 $ 260.8 $ 262.4
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed
Charges(a)...................... 1.56 1.59 1.55 1.53 1.58 1.56 1.55
---- ---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ---- ----
</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-3
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SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31
1999 2000
------------ -----------
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents................................. $ 333.3 $ 676.3
Investments in Debt and Equity Securities................. 2,666.9 2,883.8
Finance Receivables, net of unearned finance income....... 49,766.7 48,367.7
Allowance for Losses on Finance Receivables............... (1,408.4) (1,390.6)
Insurance Policy and Claims Reserves...................... (840.8) (826.8)
Other Assets.............................................. 9,662.4 12,505.3
--------- ---------
Total Assets...................................... $60,180.1 $62,215.7
========= =========
Liabilities and Stockholders' Equity:
Notes Payable, unsecured short-term
Commercial paper....................................... $13,672.9 $15,092.1
Bank loans............................................. 990.7 --
Accounts Payable and Accruals............................... 1,398.9 1,675.1
Long-Term Debt, unsecured due within one year
Senior................................................. 6,666.8 6,710.0
Subordinated........................................... -- --
Capital................................................ 0.1 0.1
Long-Term Debt, unsecured
Senior................................................. 27,746.3 28,783.2
Subordinated........................................... 425.0 425.0
Capital................................................ 0.1 0.1
--------- ---------
Total Long-Term Debt.............................. 34,838.3 35,918.4
Stockholders' Equity...................................... 9,279.3 9,530.1
--------- ---------
Total Liabilities and Stockholders' Equity........ $60,180.1 $62,215.7
========= =========
</TABLE>
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<PAGE> 5
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 June 15, 2004 (the
"Maturity Date");
- will be repayable at the option of the holder as described below; and
- will not be redeemable by the Company prior to maturity.
INTEREST
Interest on the Notes will be payable on the fifteenth day of March, June,
September and December (each, an "Interest Payment Date") of each year,
commencing on September 15, 2000, except that if any such Interest Payment Date
falls on a day that is not a Business Day (as defined below), such Interest
Payment Date will be postponed to the next day that is a Business Day unless it
would thereby fall into the next calendar month, in which event such Interest
Payment Date shall be brought forward to the immediately preceding Business Day.
The rate of interest for each Interest Period of the Notes is the Three-Month
LIBOR Rate, plus the following applicable spread:
<TABLE>
<CAPTION>
INTEREST PERIODS: SPREAD:
----------------- -------
<S> <C>
From June 27, 2000 to but excluding June 15, 2001........... 0.00%
From June 15, 2001 to but excluding June 15, 2002........... 0.04%
From June 15, 2002 to but excluding June 15, 2003........... 0.07%
From June 15, 2003 to but excluding June 15, 2004........... 0.10%
</TABLE>
Such rate of interest shall be determined for each Interest Period on the
second London Banking Day (as defined in the ISDA Definitions, which is defined
below) preceding the relevant Reset Date (as defined below). The "Three-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
S-5
<PAGE> 6
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
three months; 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.
"Interest Period" means (i) the period from and including June 27, 2000, 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 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 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
S-6
<PAGE> 7
Reset Date with respect to such Note. The Trustee will not be responsible for
determining the interest rate applicable to any Note.
REPAYMENT AT OPTION OF HOLDER
The Notes will be repayable on June 15, 2001 and every June 15 prior to
maturity (each an "Annual Optional Repayment Date") at the option of holders of
the Notes, at 100% of their principal amount together with interest payable to
the date of repayment. In order for a Note to be repaid, the Company must
receive at its office or agency in the Borough of Manhattan, The City of New
York, during the period not more than sixty days nor less than twenty-one days
prior to June 15 (or if such June 15 is not a Business Day the next succeeding
Business Day) (the "Notice Period") immediately preceding the Annual Optional
Repayment Date, (i) the Note with the form entitled "Option to Elect Repayment"
on the reverse of the Note duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth the name of the holder of
the Note, the principal amount of the Note, the amount of the Note to be repaid,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that the Note to be repaid with the form entitled "Option to Elect
Repayment" on the reverse of the Note duly completed will be received by the
Company not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter, and such Note and form duly completed
are received by the Company by such fifth Business Day. Any such notice received
by the Company during the Notice Period immediately preceding the Annual
Optional Repayment Date shall be irrevocable. The repayment option may be
exercised by the holder of a Note for less than the entire principal amount of
the Note, provided the principal amount which is to be repaid is equal to $1,000
or an integral multiple of $1,000. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Note for repayment will be
determined by the Company, whose determination will be final and binding. See
"Book-Entry System" below.
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 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.
S-7
<PAGE> 8
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
Securities 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 Direct Participants to whose accounts
the Securities are credited on such record date (identified in a listing
attached to the omnibus proxy).
S-8
<PAGE> 9
As long as the Notes are represented by Global Securities registered in the
name of Cede & Co., as nominee of the Depositary, the Depositary or its nominee
will be the registered holder of the Notes and will therefore be the only entity
entitled to exercise the repayment right. In order to ensure that the Depositary
or its nominee, as applicable, will exercise the repayment right on behalf of a
Beneficial Owner in a timely manner, such Beneficial Owner must instruct the
broker or other Participant in the Depositary through which it holds its
interest in the Notes to notify the Depositary or its nominee, as applicable, of
that Beneficial Owner's desire to exercise the repayment right. Different
Participants have different cut-off times for accepting instructions from their
customers and, accordingly, each such Beneficial Owner should consult the
Participant through which it holds an interest in the Notes in order to
ascertain the cut-off time by which such an instruction must be given in order
for timely notice to be delivered to the Depositary or its nominee, as
applicable.
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
The Company and J.P. Morgan Securities Inc. ("J.P. Morgan") have entered
into an underwriting agreement dated June 22, 2000 (the "Underwriting
Agreement"), with respect to the Notes. Subject to certain conditions, J.P.
Morgan has agreed to purchase all of the Notes.
J.P. Morgan proposes to offer the Notes in part directly to the public at
the initial public offering price set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such price less a
concession of 0.10% of the principal amount of the Notes. J.P. Morgan may allow,
and such dealers may reallow, a concession not to exceed 0.05% of the principal
amount of the Notes to certain brokers and dealers. After the Notes are released
for sale to the public, the offering price and other selling terms may from time
to time be varied by J.P. Morgan.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by J.P. Morgan that it intends to make a market in
the Notes but is not obligated to do so and may discontinue market making at any
time without notice. No assurance can be given as to the liquidity of the
trading market for the Notes.
S-9
<PAGE> 10
The Company estimates that its out of pocket expenses for this offering
will be approximately $800,000.
The Company has agreed to indemnify J.P. Morgan against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In connection with the offering, J.P. Morgan may purchase and sell the
Notes in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover short positions created by J.P.
Morgan in connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Notes; and short positions created by J.P. Morgan
involve the sale by J.P. Morgan of a greater number of Notes than it is required
to purchase from the Company in the offering. J.P. Morgan also may impose a
penalty bid, whereby selling concessions allowed to broker-dealers in respect of
the Notes sold in the offering may be reclaimed by J.P. Morgan if such Notes are
repurchased by J.P. Morgan in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Notes, which may be higher than the price that might otherwise prevail in the
open market, and these activities, if commenced, may be discontinued at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
In the ordinary course of its business, J.P. Morgan has engaged, and may in
the future engage, in investment banking transactions with the Company and its
affiliates.
S-10
