<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-81579
Prospectus Supplement to Prospectus dated July 8, 1999.
$1,000,000,000
[ASSOCIATES LOGO]
Exchangeable Floating Rate Senior Notes due June 26, 2001
------------------------
Interest on the Exchangeable Floating Rate Senior Notes due June 26, 2001
will be payable quarterly on the twenty-sixth day of March, June, September and
December, commencing on September 26, 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. The Notes are not redeemable
at any time prior to maturity.
The holder of the Notes has the option to exchange the Notes at maturity
for a like principal amount of a new series of the Company's notes having the
same terms as the Notes, except for the Issue Date, Interest Payment Dates, the
spread over the Three-Month LIBOR Rate and Maturity Date, as described herein.
Any Exchange Notes issued in 2001, 2002 and 2003 will contain a similar option
to exchange at their respective maturities.
------------------------
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. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS COMPANY(1)
---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
Per Note................... 100% .20% 99.80%
Total...................... $1,000,000,000 $2,000,000 $998,000,000
</TABLE>
(1) Plus accrued interest, if any, from June 26, 2000.
------------------------
The underwriter expects to deliver the Notes 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 26, 2000.
GOLDMAN, SACHS & CO.
------------------------
Prospectus Supplement dated June 21, 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.
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-2
<PAGE> 3
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>
S-3
<PAGE> 4
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 26, 2001 (the
"Maturity Date");
- will be exchangeable at the option of the holder for a like principal
amount of a series of Exchange Notes (as defined below) having the same
terms as the Notes, except for the Issue Date, Interest Payment Dates,
Spread and Maturity Date, each as defined and as described below; and
- will not be redeemable by the Company prior to maturity.
INTEREST
Interest on the Notes will be payable on the twenty-sixth day of March,
June, September and December (each, an "Interest Payment Date"), commencing on
September 26, 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.
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 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.
S-4
<PAGE> 5
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 the Issue Date,
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.
"Issue Date" means, for the Notes, June 26, 2000.
"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 and any Exchange Notes (collectively, the
"Securities"), Chase shall be the initial "LIBOR Calculation Agent" with respect
to the Securities. The LIBOR Calculation Agent will notify the Company and the
Trustee of each determination of the interest rate applicable to the Securities
promptly after such determination is made. The Trustee will, upon the request of
the holder of any Security, 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 Security. The Trustee will not be responsible for determining the interest
rate applicable to any Security.
S-5
<PAGE> 6
EXCHANGE OF NOTES
The holder of the Notes shall have the right, as of their Maturity Date, to
exchange any principal amount of $1,000 (or an integral multiple thereof) of the
Notes for a like principal amount of a series of the Company's notes having the
same terms as the Notes, except that the new series of notes shall have the
applicable Issue Date, Interest Payment Dates, Spread and Maturity Date
specified below (each such series, "Exchange Notes"). Exchange Notes (and any
further Exchange Notes for which Exchange Notes may successively be exchanged)
will, except as provided below, include a similar provision giving the holder
thereof the right, as of the applicable Maturity Date, to exchange any principal
amount of $1,000 (or an integral multiple thereof) of such Exchange Notes (such
Exchange Notes being for these purposes sometimes referred to herein as "Prior
Notes") for a principal amount of a further series of Exchange Notes with the
same terms as Prior Notes, except that such Exchange Notes will have the
applicable Issue Date, Interest Payment Dates, Spread and Maturity Date
specified below. Any Exchange Notes issued on June 25, 2004 shall not have any
provision for the exchange thereof for any further series of Exchange Notes and
shall have a Maturity Date of June 27, 2005.
The Issue Date of any series of Exchange Notes will be the Maturity Date
for the Notes or the related Prior Notes. The Interest Payment Dates for any
series of Exchange Notes will be the twenty-sixth day of September, December and
March, and the Maturity Date, commencing on the twenty-sixth day of September
following the applicable Issue Date.
The applicable rate of interest for each Interest Period of each series of
Exchange Notes on an applicable Issue Date is the Three-Month LIBOR Rate, plus
the applicable Spread set forth below, and the applicable Maturity Date for such
Exchange Notes is as set forth below:
<TABLE>
<CAPTION>
ISSUE DATE: SPREAD: MATURITY DATE
----------- ------- -------------
<S> <C> <C>
June 26, 2001 0.04% June 26, 2002
June 26, 2002 0.07% June 26, 2003
June 26, 2003 0.10% June 25, 2004
June 25, 2004 0.10% June 27, 2005
</TABLE>
The holder may exchange Notes and any Exchange Notes, as to a principal
amount of $1,000 or an integral multiple thereof, by providing instructions and
irrevocably transferring such Notes or Exchange Notes through the Depositary for
exchange for a like amount of the series of Exchange Notes for which the same
are then exchangeable, during the period commencing on the 30th day prior to the
applicable Maturity Date and ending on the 15th day prior to the Maturity Date
of the Notes or Exchange Notes being exchanged (the "Exchange Period"). If the
holder shall fail to provide instructions to exchange Notes or Exchange Notes as
to any principal amount, as herein above provided, prior to the close of
business in New York City on the last day of the applicable Exchange Period, the
right of the holder to exchange the Notes or any Exchange Notes, as the case may
be, shall automatically terminate, and the Notes or any Exchange Notes, as to
such principal amount, will mature on the applicable Maturity Date.
Neither the Issuer nor the Underwriter makes any recommendation as to
whether a holder should exchange the Securities. Holders are urged to consult
their own advisers as to the desirability of exercising their right to exchange
the Securities.
S-6
<PAGE> 7
BOOK-ENTRY SYSTEM
Upon issuance, the Securities 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 Securities (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.
Purchases of the Securities under the Depositary's system must be made by
or through Direct Participants, which will receive a credit for the Securities
on the Depositary's records. The ownership interest of each actual purchaser of
a Security (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 Securities 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 Securities deposited by
Participants with the Depositary are registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of Securities 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 Securities; the Depositary's records reflect only the identity of the Direct
Participants to whose accounts the Securities 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 Securities 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 Securities 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
S-7
<PAGE> 8
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
Securities will trade in the Depositary's Same-Day Funds Settlement system.
Accordingly, the Depositary will require that secondary trading activity in the
Securities 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 Securities.
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
Securities; 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).
In order to ensure that a Direct Participant will timely exercise a right
to exchange a particular Security, the Indirect Participant or Beneficial Owner
of such Security must instruct the Direct Participant through which it holds an
interest in such Security to exercise such right. Firms may have different
cut-off times for accepting instructions from customers and, accordingly, each
Indirect Participant or Beneficial Owner should consult the Direct Participant
or Indirect Participant through which it holds a Security in order to ascertain
the cut-off time by which such an instruction in order for timely instructions
to be delivered to the Depositary. None of the Company or any agent of either of
them will have any liability to the holder or to Participant, Indirect
Participant or Beneficial Owner for any delay in exercising its option to
exchange a Security.
The Depositary may discontinue providing its services as securities
depositary with respect to the Securities 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 Securities in exchange for all the Global Securities
representing such Securities. In addition, the Company may at any time and in
its sole discretion determine not to have the Securities represented by Global
Securities and, in such event, will issue individual definitive Securities in
exchange for all the Global Securities representing the Securities. Individual
definitive Securities 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.
S-8
<PAGE> 9
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.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material United States federal income
tax consequences of the ownership of Securities as of the date hereof. Except
where noted, it deals only with Securities 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 Securities as a part of a hedging, conversion or
constructive sale transaction or a straddle or holder of Securities 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
Securities 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.
As used herein, a "United States Holder" of a Security 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.
In general, for the reasons set out below, a United States Holder of a
Security should include stated interest in income as it is paid or accrued, in
accordance with the holder's method of tax accounting. In addition, a United
States Holder of a Security should not recognize gain or loss prior to the
redemption or disposition of the Securities. However, the matter is not free
from doubt. United States Holders of the Securities should therefore consult
their own tax advisors regarding the tax treatment of the Securities.
Under the original issue discount Treasury Regulations, the treatment of a
debt instrument, such as the Securities, with a maturity date that may be
extended at the option of the holder will depend on whether the option to extend
is treated as exercised. The option to extend will be treated as exercised if
the resulting yield on the debt instrument would be greater than it would be if
the option to extend were not exercised. Since the exercise of the option to
extend would maximize the yield on the Securities, under the applicable original
issue discount Treasury
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<PAGE> 10
Regulations, the Securities would be treated as having a maturity of five years.
In addition, under the original issue discount Treasury Regulations, the
interest rate formulas on the Securities should qualify as a single qualified
floating rate. This is because, under the interest rate formulas, the values of
all interest rates on the issue date of the Securities will be within 0.25
percentage points of each other. Under this approach, the Securities would
qualify as variable rate debt instruments under the original issue discount
Treasury Regulations which were issued without original issue discount.
Accordingly, all interest payable on the Securities should be treated as
qualified stated interest and 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 Holders' method of accounting for tax purposes.
Other treatments of the Securities for Federal income tax purposes are also
possible. For example, the transactions could be treated as the issuance of a
series of debt instruments with one-year maturities which are exchanged or
deemed exchanged for other debt instruments. So viewed, holders could recognize
gain upon the exercise of the exchange option. Accordingly, prospective holders
should consult their tax advisors with respect to the Federal income tax
consequences of the purchase and holding of the Securities, and exercise of the
option to exchange.
UNDERWRITING
The Company and Goldman, Sachs & Co. ("Goldman Sachs") have entered into an
underwriting agreement dated June 21, 2000 (the "Underwriting Agreement"), with
respect to the Notes. Subject to certain conditions, Goldman Sachs has agreed to
purchase all of the Notes.
Goldman Sachs 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. Goldman Sachs 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 Goldman Sachs.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by Goldman Sachs 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.
The Company has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
In connection with the offering, Goldman Sachs 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
Goldman Sachs 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 Goldman
Sachs involve the sale by Goldman Sachs of a greater number of Notes than it is
required to purchase from the Company in the offering. Goldman Sachs 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 Goldman Sachs if
such Notes are repurchased by Goldman Sachs
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<PAGE> 11
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, Goldman Sachs has engaged, and may
in the future engage, in investment banking transactions with the Company and
its affiliates. In addition, an Advisory Director of The Goldman Sachs Group, an
affiliate of Goldman Sachs, is one of the directors of Associates First Capital
Corporation, the parent of the Company.
S-11
<PAGE> 12
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
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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
Certain United States Federal Income
Tax Considerations................... S-9
Underwriting........................... S-10
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>
$1,000,000,000
[ASSOCIATES CORP. OF NORTH AMERICA LOGO]
Exchangeable Floating Rate
Senior Notes
due June 26, 2001
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
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