<PAGE> 1
Pursuant to Rule 424(b)(2)
Registration No. 33-60769
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED
AUGUST 11, 1995)
$150,000,000
LOGO
INVESTMENT NOTES
DUE 1, 2, 3, 4 OR 5 YEARS FROM ISSUE DATE
<TABLE>
<CAPTION>
INTEREST EFFECTIVE ANNUAL YIELD IF
NOTE RATE PER INTEREST COMPOUNDED QUARTERLY
MATURITY ANNUM AND PAID ANNUALLY OR AT MATURITY
------------ ------------ --------------------------------
<S> <C> <C>
1 YEAR % %
2 YEARS % %
3 YEARS % %
4 YEARS % %
5 YEARS % %
</TABLE>
$1,000 MINIMUM PURCHASE
At the option of the purchaser, interest is payable quarterly, annually, at
maturity, or, for Notes in denominations of $5,000 or more, monthly. If interest
is payable annually or at maturity, such interest is compounded quarterly at the
stated rate, resulting in an annual yield on a Note, by each maturity, as set
forth above under "Effective Annual Yield".
The rates of interest or the maturities on Notes offered hereby may be
changed by Associates First Capital Corporation (the "Company") from time to
time without notice, but any such change shall not affect the rate of interest
or the maturity on any Note purchased prior to the effective date of the change.
The rate of interest established for any Note will be that rate which is in
effect at the consummation of the sale. The Notes are prepayable at the option
of the party entitled to receive the proceeds of the Note under Certain
Circumstances. See "Description of Notes -- Prepayment."
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.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC AND COMMISSIONS COMPANY
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Unit............. 100%(1) .1% to .5%(2) (3)
---------------------------------------------------------------------------------------------------------
Total................ $150,000,000 (2) (3)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) No person other than associated persons of the Company participated in
determining the price and other terms of the offering.
(2) Commissions based upon the amount and maturity of each Note sold will be
paid by the Company to AFC Securities Inc., Dallas, Texas, an indirect
subsidiary of the Company. AFC Securities Inc. may from time to time be engaged
in various capacities in connection with the offer and sale of securities issued
by the Company or its affiliates. See "Plan of Distribution".
(3) The proceeds to the Company will be 99.9%, 99.8%, 99.7%, 99.6% and 99.5%
of the principal amount of the Notes having maturities of 1, 2, 3, 4 and 5
years, respectively. The amount of proceeds to the Company is further subject to
a deduction of expenses by the Company estimated at $560,000. The Notes are to
be sold on a best efforts basis. There is no assurance as to the amount of
proceeds, if any, to be received and no minimum amount of the offering is
required to be sold. No arrangements have been made to place any of the proceeds
of the offering in an escrow, trust or similar arrangement.
---------------------
The Notes will not be listed on any exchange and it is not expected that
there will be a secondary market for the Notes. The Notes represent obligations
of the Company and are not insured or guaranteed by the FDIC or any other
government agency or instrumentality.
AFC SECURITIES INC.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS AUGUST 24, 1995
<PAGE> 2
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, 1994 and its Quarterly Report on Form 10-Q for the six months ended
June 30, 1995, available as described under "Documents Incorporated by
Reference", and is qualified in its entirety by the detailed information and
financial statements set forth therein.
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31 JUNE 30
---------------------------------------------------- -------------------
1990 1991 1992 1993 1994 1994 1995
-------- -------- -------- -------- -------- -------- --------
(DOLLAR AMOUNTS IN MILLIONS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUE AND EARNINGS
Revenue --
Finance charges............................. $2,274.5 $2,786.9 $2,960.3 $3,276.3 $3,898.2 $1,823.7 $2,322.6
Insurance premiums.......................... 212.7 202.5 209.9 242.2 293.5 133.4 165.0
Investment and other income................. 238.3 197.7 176.4 187.1 213.6 106.2 119.1
-------- -------- -------- -------- -------- -------- --------
2,725.5 3,187.1 3,346.6 3,705.6 4,405.3 2,063.3 2,606.7
Expenses --
Interest expense............................ 1,217.3 1,347.8 1,281.4 1,340.5 1,558.2 714.6 983.9
Operating expenses.......................... 653.8 773.6 846.2 1,022.3 1,237.5 598.3 739.4
Provision for losses on finance
receivables............................... 309.6 434.2 512.6 476.1 577.5 275.9 353.4
Insurance benefits paid or provided......... 96.8 91.1 100.0 114.9 144.1 71.1 66.0
-------- -------- -------- -------- -------- -------- --------
2,277.5 2,646.7 2,740.2 2,953.8 3,517.3 1,659.9 2,142.7
-------- -------- -------- -------- -------- -------- --------
Earnings Before Provision for Income Taxes and
Cumulative Effect of Changes in Accounting
Principles.................................. 448.0 540.4 606.4 751.8 888.0 403.4 464.0
Provision for Income Taxes.................... 160.2 193.1 213.2 281.7 339.9 154.5 171.0
-------- -------- -------- -------- -------- -------- --------
Earnings Before Cumulative Effect of Changes
in Accounting Principles.................... 287.8 347.3 393.2 470.1 548.1 248.9 293.0
Cumulative Effect of Changes in Accounting
Principles(a)............................... -- -- (10.4) -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net Earnings.................................. $ 287.8 $ 347.3 $ 382.8 $ 470.1 $ 548.1 $ 248.9 $ 293.0
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges(b)......... 1.37 1.40 1.47 1.56 1.57 1.56 1.47
--- --- --- --- --- --- ---
--- --- --- --- --- --- ---
</TABLE>
---------------
(a) The Company recorded a one-time cumulative effect of changes in accounting
principles related to the adoption, effective January 1, 1992, of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions", and SFAS No. 109, "Accounting for Income Taxes".
(b) For purposes of computing the Ratio of Earnings to Fixed Charges, "earnings"
represent earnings before provision for income taxes and cumulative effect
of changes in accounting principles, plus fixed charges. "Fixed charges"
represent interest expense and a portion of rentals representative of an
implicit interest factor for such rentals.
S-2
<PAGE> 3
SUMMARY FINANCIAL INFORMATION -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
1994 1995
----------- ---------
(UNAUDITED)
<S> <C> <C>
(IN MILLIONS)
BALANCE SHEET DATA
Assets:
Cash and Cash Equivalents................................................. $ 410.0 $ 350.3
Investments in Debt and Equity Securities
Bonds and Notes......................................................... 563.2 866.9
Stocks.................................................................. 41.9 14.2
--------- ---------
Total Investments in Debt and Equity Securities.................... 605.1 881.1
Finance Receivables, net of unearned finance income
Consumer Finance........................................................ 21,360.1 23,191.3
Commercial Finance...................................................... 9,815.9 10,785.4
--------- ---------
Total Net Finance Receivables...................................... 31,176.0 33,976.7
Allowance for Losses on Finance Receivables............................... (944.3) (1,041.4)
Other Assets.............................................................. 1,000.2 963.1
--------- ---------
Total Assets....................................................... $32,247.0 $35,129.8
========= =========
Liabilities and Stockholder's Equity:
Notes Payable unsecured short-term(c)
Commercial paper........................................................ $11,640.5 $12,577.4
Bank loans.............................................................. 571.4 294.0
Long-Term Debt due within one year(c)
Senior.................................................................. 2,132.5 2,726.8
Subordinated............................................................ -- --
Capital................................................................. 0.1 0.1
Accounts Payable and Accruals............................................. 875.5 901.2
Insurance Policy and Claims Reserves...................................... 545.6 575.2
Long-Term Debt(c)
Senior.................................................................. 13,379.8 14,783.9
Subordinated............................................................ 141.2 141.2
Capital................................................................. 0.5 0.5
--------- ---------
Total Long-Term Debt............................................... 13,521.5 14,925.6
Stockholder's Equity(d)................................................... 2,959.9 3,129.5
--------- ---------
Total Liabilities and Stockholder's Equity......................... $32,247.0 $35,129.8
========= =========
</TABLE>
---------------
(c) 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.
(d) At December 31, 1994 and June 30, 1995, the Company's capital stock
consisted of no par value Common Stock, 250 shares authorized and
outstanding, at stated value.
S-3
<PAGE> 4
APPLICATION OF PROCEEDS
The following information supplements the description contained in the
section entitled "Application of Proceeds" set forth in the Prospectus, to which
description reference is hereby made.
Associates Corporation of North America ("Associates"), the principal
operating subsidiary of the Company, has, as a matter of practice for a number
of years, voluntarily limited its cash dividends in order to increase its equity
base (net worth). In 1993, Associates issued a series of debt securities which
matures on August 1, 1996 which contains a dividend limitation that prevents,
with certain exceptions, Associates from paying dividends (other than stock
dividends) in excess of 50% of the consolidated net earnings of Associates,
determined in accordance with generally accepted accounting principles.
Allowable dividends not paid in one fiscal year may be paid in any of the five
succeeding fiscal years.
The payment of cash dividends by Associates to the Company averaged 45% of
consolidated net earnings over the last five fiscal years ended December 31,
1994, and did not exceed, or would not have exceeded, the foregoing limitation.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements the description of the general terms and provisions of the
Notes set forth in the Prospectus, to which description reference is hereby
made.
The Notes are to be issued under an indenture dated as of June 15, 1995
(the "Indenture") between the Company and First Interstate Bank of Texas, N.A.,
as Trustee (the "Trustee"), which may be supplemented from time to time, copies
of which are filed as exhibits to the Registration Statement. The following
statements are subject to the detailed provisions of the Indenture, including
the definition of certain terms. Whenever particular articles, sections or
defined terms (capitalized hereinbelow) are referred to, they are incorporated
by reference as a part of the statement which is qualified in its entirety by
such reference. All numerical references set forth herein relate to the Original
Indenture, unless specific reference is made to a Supplemental Indenture.
The Company reserves the right to withdraw, cancel or modify the offer
without notice and may reject orders in whole or in part.
DATE, INTEREST AND PAYMENT
The Notes will be limited to $150,000,000 aggregate principal amount and
will mature in 1, 2, 3, 4 or 5 years from issue date. The Notes will bear
interest from the date issued at the rate per annum shown on the face of the
Note and until payment of principal is made or duly provided for. Interest will
be paid, at the option of the purchaser, at maturity, at annual or quarterly
intervals, or if the Note is in a denomination of $5,000 or more, at monthly
intervals from date of issue to the person in whose name the Note is registered
8 days prior to the Interest Payment Date, or after Stated Maturity, to the
person in whose name the Note is registered on such Interest Payment Date. If
payable annually or at maturity, interest at the stated rate will be compounded
quarterly. The
S-4
<PAGE> 5
election of the purchaser made at the time of the purchase of the Note to take
interest monthly, quarterly, annually or at maturity is irrevocable during the
term of the Note, except the Noteholder may change an interest payment election
once during the 45 day period commencing with the original date of purchase of
the Note as follows: such change in election must be made by depositing in the
U.S. Mail, postage prepaid, postmarked within the 45 day period and addressed to
AFC Securities Inc. (i) a new election in the manner specified by the Company,
and (ii) all interest checks, if any, issued to the date of the new election or
in the case of an automatic transfer of funds a personal check in the amount of
all interest payments so transferred to the date of the new election. Principal
of a Note will be paid or reinvested pursuant to a Noteholder's instructions at
maturity only upon surrender of the Note.
If the principal of the Note is not paid at Stated Maturity for any reason
other than default of the Company, interest will continue to accrue after Stated
Maturity at the lower of the "13 week Treasury Rate" (defined below) or 9% per
annum, until the earlier of (a) the Note is presented for payment, or (b) at the
sole option of the Company, the Company notifies the Noteholder in writing, that
(i) if at least 15 days prior to Stated Maturity, the Note will not accrue
interest after Stated Maturity; or (ii) if within a 15 day period prior to
Stated Maturity thereof, or thereafter, the Note will cease to accrue interest
after Stated Maturity on the fifteenth day after the date of such notice. The
"13 week Treasury Rate" shall mean the discount rate for the auction held weekly
of direct obligations of the United States ("Treasury bill") having a 13 week
maturity as published in the Federal Reserve Statistical Release -- Selected
Interest Rates H.15(519) or its successor, or if none, as announced in the Wall
Street Journal under the heading "Treasury bills -- auction average
(investment) -- 3 month" or, if not so published by 9:00 a.m., New York City
time, on each Tuesday pertaining to such week, the 13 week Treasury Rate last
announced. If the 13 week Treasury Rate is the applicable interest rate after
Stated Maturity, such rate shall apply from the Wednesday after the announcement
through and including the following Tuesday. Interest accruing after Stated
Maturity will be paid in accordance with the interest payment terms so elected
as provided hereinabove by the Noteholder.
Principal and interest, if any, are to be payable at the principal office
of the Company in Dallas, Texas, or at offices of certain subsidiaries which the
Company may designate from time to time by notifying the Noteholders; provided
that payment may be made at the option of the Company: (1) by check mailed to
the address of the Person entitled thereto as such address appears on the
records of the Company maintained for that purpose; or (2) if so agreed to by
the Noteholder and the Company, by automatic transfer of funds to an account
designated by such Noteholder within 4 business days after the Interest Payment
Date. An alternate payee for interest payments may be designated by all Holders
of a Note under such rules as the Company may establish.
The Notes represent obligations of the Company and are not insured or
guaranteed by the FDIC or any other government agency or instrumentality.
All Notes other than those that would be registered to the custodian or
trustee of an Individual Retirement Account ("IRA") will be issued only in fully
registered form without coupons. The Notes may be transferred or exchanged at
the aforementioned offices, subject to the limitations provided in the
Indenture, without the payment of any service charge except for any tax or
governmental charge incidental thereto. (Article Three)
S-5
<PAGE> 6
IRA NOTES
A single, fully registered Global Note that will be deposited with First
Interstate Bank of Texas, N.A., as Depository and agent for the holders of
beneficial interests in the Global Note (the "IRA Global Note"), will be issued
to represent Notes that would have been registered to 1st Source Bank, South
Bend, Indiana, as a custodian or trustee of an IRA. Such custodian or trustee of
an IRA will hold a beneficial interest in the IRA Global Note. Each such
beneficial interest may have a different interest rate, stated maturity and
other terms. The IRA Global Note may not be transferred except as a whole to a
nominee of the Depository for such IRA Global Note, to a successor Depository
selected and approved by the Company or to a nominee of such successor
Depository.
Ownership of beneficial interests in the IRA Global Note will be shown on
records maintained by the Company and the Depository. Except as provided below,
owners of beneficial interests in the IRA Global Note will not be entitled to
have Notes registered in their names, will not receive or be entitled to receive
physical delivery of Notes in fully registered form, and will not be considered
the owners or holders thereof under the Indenture.
Beneficial interests in the IRA Global Note may be exchanged for Notes in
fully registered form without coupons at the option of the holder of the
beneficial interest, 1st Source Bank, or a successor custodian or trustee.
Transfer of any beneficial interest in the IRA Global Note may only be effected
through issuance of a fully registered Note to the transferee. In addition, the
Company may at any time determine not to have the Notes represented by the IRA
Global Note and, in such event, will issue Notes in fully registered form in
exchange for the IRA Global Note. In any such instance, 1st Source Bank or a
successor trustee or custodian, the owner of the beneficial interests in the IRA
Global Note, will be entitled to have Notes equal in principal amount to such
beneficial interests registered in its name and will be entitled to physical
delivery of such Notes in fully registered form. Notes so issued in fully
registered form will be issued in denominations of $1,000 and integral multiples
thereof. Whenever presentment or surrender is required for the registration of
transfer or exchange, redemption or payment of any portion of the IRA Global
Note, presentment or surrender shall be effected by delivery of a written
instrument acceptable to the Trustee and the Company.
PREPAYMENT
The Notes are prepayable at the option of the party entitled to receive the
proceeds of the Note in the event of the death or disability (as defined in 42
U.S.C.A. sec. 416(i)) of a registered Noteholder who is a natural person. For
purposes of prepayment of a Note, disability is determined according to the
standards applicable to the Social Security Administration, which is, generally,
blindness or the inability to engage in substantial gainful activity by reason
of a medically determinable impairment which can be expected to last 12 months
or which can be expected to result in death.
With respect to any beneficial interest of the IRA Global Note or any Note
registered to the custodian or trustee of an IRA, such beneficial interest or
other Note will be eligible for prepayment as determined by the custodian or
trustee upon the death, disability or attainment of age 59 1/2 of the IRA
holder. In addition, the Note shall be prepaid upon the April 1 following the
calendar year during which the IRA holder attains the age of 70 1/2.
S-6
<PAGE> 7
Except as stated above with respect to IRA holders, any Note registered
solely in the name of a custodian, trust or other entity is not prepayable on
the death of a natural person who is a beneficial owner pursuant to such
custodial, trust or other registered form of ownership. Any request for
prepayment shall be subject to the prior receipt by the Company of the Note
accompanied by such other documentation which may reasonably be required by the
Company to establish that such Note qualifies for prepayment and who is the
proper party for payment of the proceeds. Any prepayment of a Note shall be in
whole and not in part.
RESTRICTIVE PROVISIONS
The Indenture does not limit 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. In addition, the Indenture does not contain any covenant or other
provision that is specifically intended to afford any Noteholder special
protection in the event of a highly leveraged transaction.
TAX CONSEQUENCES AND WITHHOLDING
The Internal Revenue Code of 1986, as amended (the "Code"), generally
requires reporting and inclusion of interest as income to the Noteholder and
will, in certain instances require backup withholding by the payor of 31% of all
reportable payments (or amounts equivalent thereto).
In general, the Company is required to file with the Internal Revenue
Service each year over the term of the Note, or for the year in which the Note
matures in the case of a Note with a maturity of one year, a Form 1099
information return (with a copy to the Noteholder) reporting the amount of
interest which is paid or which is considered earned by the Noteholder for the
year as described below, and the Noteholder is required to include such amount
as income in his or her Federal income tax return for that year. In addition,
the Company may be required to report the amount paid at maturity on Form 1099B.
INTEREST PAID AT MATURITY
If a purchaser elects to have all interest paid at maturity, under the Code
the difference between the total amount paid at maturity ("the stated redemption
price at maturity") and the original purchase price of a Note ("the issue
price") is the original issue discount, and a specified portion of such original
issue discount is treated as taxable income to the Noteholder accruing each year
during the term of the Note even though no interest payments are actually made
until maturity.
The original issue discount to be reported as taxable income each year is
determined in the following manner under Code section 1272. The amount of
original issue discount attributable to each "accrual period" is computed by
multiplying the "adjusted issue price" of the Investment Note at the beginning
of the accrual period by the "yield to maturity". In the case of Investment
Notes the accrual period is each three month period beginning with the issue
date of the Note. The yield to maturity is determined on the basis of
compounding at the close of each accrual period. The adjusted issue price of an
Investment Note at the beginning of any accrual period is the Investment Note's
original purchase price increased by the amount of original issue discount
attributable to all prior accrual periods. For purposes of computing the amount
of original issue discount to be
S-7
<PAGE> 8
included in the taxable income of a Noteholder for a taxable year, the total
amount of original issue discount computed for each accrual period is allocated
ratably on a daily basis over the accrual period. The daily portions
attributable to the period of time the Investment Note is owned by the
Noteholder during the tax year are includible in the Noteholder's gross income
for the year.
With respect to Investment Notes with a maturity of one year, the above
rules do not apply. If the Noteholder is a cash basis taxpayer and if the one
year Note is not subject to Code section 1281 (which requires current inclusion
in income of "acquisition discount" on certain short-term obligations), there
will be no original issue discount, and the Holder will have taxable interest
income in the year in which interest is paid. If the Investment Note is a
short-term obligation to which Code section 1281 applies (as described below),
the Noteholder must accrue the original issue discount attributable to the Note.
For a one year Investment Note, the original issue discount would be the excess
of the total amount payable at maturity over the Noteholder's tax basis for the
Note. Current inclusion in income is required of an amount equal to the daily
portions of the original issue discount for each day during the taxable year on
which the Note is held. Such daily portion is to be determined on the basis of
ratable accrual of the original issue discount or on a constant interest basis,
compounded daily. A taxpayer subject to Code section 1281 can, with respect to
nongovernmental obligations, elect to accrue acquisition discount instead of
original issue discount, under the rules of Code section 1281.
A one year Investment Note will be subject to the provisions of Code
section 1281 if the Note is (1) held by a taxpayer using an accrual method of
accounting, (2) held primarily for sale to customers in the ordinary course of
the taxpayer's trade or business, (3) held by a bank (as defined in Code section
581), (4) held by a regulated investment company or a common trust fund, (5)
identified by the taxpayer under Code section 1256(e)(2) as being part of a
hedging transaction (6) a stripped bond or a stripped coupon held by the person
who stripped the bond or coupon (or by any other person whose basis is
determined by reference to the basis in the hands of such person). In addition,
there are special rules which apply to "pass-through entities", such as a
partnership, S corporation, or trust.
The tax basis of any Investment Note in the hands of a Holder will be
increased by amounts included in the income of the Holder under Code sections
1272 or 1281.
The foregoing is a brief explanation. Noteholders are advised to consult
their own tax advisors, particularly if interest is to be deferred and paid at
maturity.
WITHHOLDING
The Code provides for backup withholding at a rate of 31% on certain
payments of interest and dividends and of reportable principal at maturity.
Backup withholding may apply only to dividend, interest, or certain other
payments.
Under the backup withholding provisions, withholding may be imposed either:
(1) after the Secretary of the Treasury has mailed four notices to the
taxpayer stating that the taxpayer has underreported his income, and, if
the taxpayer has filed a return for the taxable year in which he
underreported income, the Secretary has made a deficiency assessment
against the taxpayer;
(2) if the taxpayer fails to furnish a taxpayer identification number
when required to do so;
S-8
<PAGE> 9
(3) if the Secretary notifies the payor that the taxpayer furnished an
incorrect taxpayer identification number; or
(4) with respect to instruments acquired after 1983, the taxpayer
fails to certify under penalty of perjury that he is not subject to backup
withholding as a consequence of having underreported his income.
Any payor required to withhold from payments on the basis of taxpayer
underreporting of income is required to notify the payee at the time the
withholding begins.
PLAN OF DISTRIBUTION
The Company has designated AFC Securities Inc. ("AFC"), Dallas, Texas, an
indirect subsidiary of the Company, to sell the Notes offered hereby at face
amount directly to the public on a best efforts basis in those states in which
AFC is qualified to effect such sales. On all sales made, there shall be paid a
commission by the Company to AFC equal to .1% of the principal amount of the
Notes having a maturity of 1 year, .2% of the principal amount of the Notes
having a maturity of 2 years, .3% of the principal amount of the Notes having a
maturity of 3 years, .4% of the principal amount of the Notes having a maturity
of 4 years and .5% of the principal amount of the Notes having a maturity of 5
years. No commissions are payable to AFC by the purchasers of the Notes.
AFC may from time to time be engaged in various capacities in connection
with the offer and sale of debt securities issued by the Company and its
affiliates on a best efforts basis.
This offering complies with Schedule E of the NASD By-Laws.
S-9
<PAGE> 10
PROSPECTUS
LOGO LOGO
DEBT SECURITIES
---------------------
Associates First Capital Corporation (the "Company") from time to time may
issue in one or more series its senior, unsecured debt securities ("Notes") for
proceeds up to $300,000,000. The Notes of each series may be offered from time
to time or on a continuous basis on terms determined by the Company at the time
of the offer. The specific designation, aggregate principal amount, rate (or
method of calculation) and time or intervals of payment of any interest,
authorized denominations, maturity or maturities or range of maturities,
offering price, any prepayment or redemption terms, provisions for establishing
different rates of interest and maturities for Notes of the same series or other
specific terms of the series of Notes in respect of which this Prospectus is
being delivered are set forth in the accompanying Prospectus Supplement
("Prospectus Supplement").
The Notes may be sold through underwriters or agents, which may include AFC
Securities Inc., Dallas, Texas, an indirect subsidiary of the Company. The names
of any underwriters or agents involved in the sale of the Notes in respect of
which this Prospectus is being delivered and their compensation are set forth in
the accompanying 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.
---------------------
THE DATE OF THIS PROSPECTUS IS AUGUST 11, 1995
<PAGE> 11
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 AGENT. 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 THE
PROSPECTUS SUPPLEMENT NOR ANY TRANSACTION HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
---------------------
THE FOLLOWING INFORMATION, WHICH IS BEING DISCLOSED PURSUANT TO FLORIDA
LAW, IS ACCURATE AS OF THE DATE OF THIS PROSPECTUS: AUTOLATINA-COMERCIO,
NEGOCIOS E PARTICIPACOES LTDA., A BRAZILIAN COMPANY ("AUTOLATINA"), IS A JOINT
VENTURE BETWEEN FORD MOTOR COMPANY ("FORD", THE INDIRECT PARENT CORPORATION OF
THE COMPANY), AND VOLKSWAGEN AG IN WHICH FORD HAS A 49% OWNERSHIP INTEREST.
AUTOLATINA OCCASIONALLY SELLS VEHICLES TO PERSONS LOCATED IN CUBA. EACH SUCH
SALE IS MADE PURSUANT TO A SPECIFIC LICENSE GRANTED TO FORD BY THE U.S.
DEPARTMENT OF TREASURY. THE LAST SUCH SALE, WHICH INVOLVED ONE MEDICAL SUPPLY
VEHICLE, WAS MADE TO CUBANACAN IN APRIL 1991. CURRENT INFORMATION CONCERNING
AUTOLATINA'S OR ITS FORD-RELATED AFFILIATES' BUSINESS DEALINGS WITH THE
GOVERNMENT OF CUBA OR WITH PERSONS LOCATED IN CUBA MAY BE OBTAINED FROM THE
STATE OF FLORIDA DEPARTMENT OF BANKING AND FINANCE AT THE CAPITOL BUILDING,
SUITE 1401, TALLAHASSEE, FLORIDA 32399-0350 (TELEPHONE NUMBER 904-488-0545).
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 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 7 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. 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 does not publish annual or other periodic reports to security
holders.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994, and its Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995 and June 30, 1995, heretofore filed with the Commission pursuant to the
Securities Exchange Act of 1934, are incorporated herein 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 Notes 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 FIRST CAPITAL
CORPORATION, P.O. BOX 660237, DALLAS, TX 75266-0237, ATTENTION: SECRETARY (TEL.
214-541-4000).
2
<PAGE> 12
THE COMPANY
Associates First Capital Corporation ("First Capital" or the "Company"), a
Delaware corporation, is an indirect subsidiary of Ford Motor Company. First
Capital's principal operating subsidiary is Associates Corporation of North
America ("Associates"), the second largest independent finance company in the
United States as of September 30, 1994. Unless the context otherwise requires,
reference to First Capital or Associates includes each parent company and all
its subsidiaries.
First Capital, through 1,473 branch offices in the United States at
December 31, 1994, is engaged primarily in consumer finance, commercial finance
and insurance underwriting. The consumer finance operation is engaged in making
and investing in residential real estate-secured loans to individuals, making
secured and unsecured installment loans to individuals, purchasing consumer
retail installment obligations, investing in credit card receivables, financing
manufactured housing purchases, and providing other consumer financial services.
The commercial finance operation is principally engaged in the purchase of time
sales obligations and leases, direct leases and secured direct loans, and sales
of other financial services, including automobile club, mortgage banking and
relocation services. The insurance operation is engaged in the property and
casualty insurance business and in the credit life, credit accident and health
and accidental death and dismemberment insurance business, principally for
customers of the finance operations of the Company.
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. 214-541-4000).
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges of the Company for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31 ENDED
---------------------------------------- JUNE 30
1990 1991 1992 1993 1994 1995
----- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C>
1.37 1.40 1.47 1.56 1.57 1.47
</TABLE>
For purposes of computing the Ratio of Earnings to Fixed Charges, "earnings"
represent earnings before provision for income taxes and cumulative effect of
changes in accounting principles, plus fixed charges. "Fixed charges" represent
interest expense and a portion of rentals representative of an implicit interest
factor for such rentals.
APPLICATION OF PROCEEDS
The entire net proceeds to be received by First Capital from the sale of
Notes (without any firm commitment by anyone to purchase such Notes and with
respect to which there can be no assurance that any of the Notes will be sold)
will be added to the general funds of First Capital. The proceeds will be used
by First Capital to pay interest and principal on outstanding indebtedness
(including notes previously issued) and additionally may be used to enter, by
acquisition or otherwise, additional fields of business activities which First
Capital shall consider to be compatible with its present activities, or may be
advanced to or invested in subsidiaries or affiliates, the most
3
<PAGE> 13
significant of which is Associates, for such purposes as relate to their
respective businesses. As is common to companies in the finance industry,
Associates uses its equity to support unsecured borrowings of both long and
short-term debt in a total amount substantially greater than its equity.
Consequently, any part of the proceeds generated from sales of the Notes offered
hereby which is invested in the equity of Associates will become part of the
borrowing base of Associates and would be subject to unsecured claims of the
debtholders of Associates, if Associates should be unable to repay its
borrowings as they mature. The amount of funds to be used for any of these
purposes is not now determinable.
DESCRIPTION OF NOTES
The Notes are to be issued under an indenture dated as of June 15, 1995
(the "Indenture") between the Company and First Interstate Bank of Texas, N.A.,
as Trustee (the "Trustee"), which may be supplemented from time to time, a copy
of which is filed as an exhibit to the Registration Statement. The following
statements are subject to the detailed provisions of the Indenture, including
the definition of certain terms. Whenever particular articles, sections or
defined terms (capitalized hereinbelow) are referred to, they are incorporated
by reference as a part of the statement which is qualified in its entirety by
such reference. All numerical references set forth herein relate to the Original
Indenture, unless specific reference is made to a Supplemental Indenture.
The Company reserves the right to withdraw, cancel or modify the offer
without notice and may reject orders in whole or in part.
GENERAL
The Indenture does not limit the amount of Notes which may be issued
thereunder and provides that the Notes may be issued thereunder up to the
aggregate principal amount which may be authorized from time to time by the
Company. Reference is made to the Prospectus Supplement which accompanies this
Prospectus for the following terms and other information with respect to the
Notes being offered thereby: (1) the designation, aggregate principal amount and
authorized denominations of such Notes; (2) the percentage of their principal
amount at which such Notes will be issued; (3) the maturities; (4) the rate per
annum at which such Notes will bear interest, if any, or the method of
determination of such rate; (5) the dates or intervals on which such interest,
if any, will be payable; (6) provisions for establishing different rates of
interest and maturities for Notes of the same series; (7) whether such Notes are
to be issued in whole or in part in the form of one or more global securities
(each a "Global Note") and, if so, the identity of the agent of the Noteholders
for such Global Note or Global Notes; and (8) any prepayment or redemption
terms, or other specific terms.
The Notes are to be issued in any denomination equal to or exceeding the
minimum denomination as determined by First Capital from time to time.
Additional notes may be issued in one or more series from time to time upon the
written order of First Capital in such aggregate principal amounts as may be
authorized by the Board of Directors or the Executive Committee of the Board of
Directors.
Principal and interest, if any, may be payable at the principal office of
the Company in Irving, Texas, or at such other office which the Company may
designate from time to time by notifying the Holders of the Notes (or, if the
Prospectus Supplement so states, by electronic transfer directly to a
4
<PAGE> 14
Noteholder's account, for which a service charge may be assessed by the
Company); provided that payment of interest, if any, may be made at the option
of the Company by check mailed to the persons in whose names the Notes are
registered at the close of business on the most recent record date preceding the
Interest Payment Date.
If the Prospectus Supplement so states, the Company may from time to time
offer and sell Notes which, at the Company's election, are not initially
represented by definitive certificates but rather an interest in a Global Note
held by an agent of such Noteholders. In such event, Noteholders will receive a
notice of purchase for each Note so purchased and held as well as interest
payments in the regular manner. Definitive Notes will be issued only in fully
registered form without coupons. The Notes may be transferred or exchanged at
the aforementioned offices, subject to the limitations provided in the
Indenture, without the payment of any service charge except for any tax or
governmental charge incidental thereto. (Article Three)
SUPERIOR INDEBTEDNESS
The Notes will constitute part of the Superior Indebtedness of the Company
and rank pari passu with all outstanding senior debt. (sec. 6.02)
MODIFICATION OF INDENTURE
The Indenture, the rights and obligations of the Company and the rights of
the Noteholders may be modified with the consent of the Noteholders of not less
than 66 2/3% in principal amount of the Notes then outstanding, and, in the case
of where one or more but less than all of the series of Notes issued under the
Indenture are so affected, of not less than 66 2/3% in principal amount of the
Notes of each series affected by the modification or amendment as a separate
class. No modification of the terms of payment of principal or interest, no
modification subordinating the indebtedness evidenced by the Notes to any other
indebtedness of the Company and no modification reducing the percentage required
for modification is effective against any Holder without his consent.
(sec. 6.03; Article Twelve)
EVENTS OF DEFAULT
The Indenture provides that the following are Events of Default with
respect to the Notes: default in the payment of the principal of the Notes 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 Notes; default of 30 days in the payment of any installment of interest on
any Note; default for 60 days after notice in the performance of any other
covenant in respect of the Notes 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; and default of 30 days in
the payment of any installment of interest on any evidence of indebtedness
issued, assumed or guaranteed by the Company or default in the payment of any
principal on any such evidence of indebtedness. (sec. 8.01) An Event of Default
with respect to a particular series of notes issued under the Indenture does not
necessarily constitute an Event of Default with respect to any other series of
notes issued thereunder. The Trustee may withhold notice to the Holders of Notes
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.
(sec. 9.02)
5
<PAGE> 15
If an Event of Default with respect to the Notes shall have occurred and be
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Notes may declare the principal of and the interest
accrued but unpaid to the date of such declaration on all of the Notes to be due
and payable immediately. (sec. 8.01)
Within four months after the close of each fiscal year, the Company must
file with the 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, the
Trustee shall be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any Holders, unless
such Holders shall have offered to the Trustee reasonable indemnity. (sec. 9.03)
Subject to such provisions of indemnification, the Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, with respect to the Notes.
(sec. 8.06)
INFORMATION CONCERNING THE TRUSTEE
The Company and certain of its subsidiaries maintain deposit accounts with
the Trustee and from time to time borrow from the Trustee and conduct other
banking transactions with it.
PLAN OF DISTRIBUTION
The Company may sell the Notes through underwriters or dealers or through
agents. The Prospectus Supplement with respect to the Notes being offered
thereby sets forth the terms of the offering of such Notes, including the name
or names of any underwriters, the purchase price of such Notes and the proceeds
to the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers. Only
underwriters so named in the Prospectus Supplement are deemed to be underwriters
in connection with the Notes offered thereby.
If underwriters are used in the sale, the Notes 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 Notes will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase all the Notes of
the series offered by the Company's Prospectus Supplement if any of such Notes
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.
The Notes may also be sold through agents designated by the Company from
time to time, which may include AFC Securities Inc. ("AFC"), an indirect
subsidiary of the Company. The business of AFC is limited to the sale of
securities issued by First Capital and Associates on a best efforts basis.
6
<PAGE> 16
The Prospectus Supplement identifies any agent involved in the offering and
sale of the Notes, any commissions payable by the Company to such agent, and any
initial public offering price and any discounts allowed or reallowed or paid to
dealers. Notes may be acquired by agents 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. Unless otherwise indicated in the Prospectus Supplement,
any such agent is acting on a best efforts basis for the period of its
appointment.
Some of the selling agents of AFC are full time employees. Certain other
selling agents of AFC are full time employees of Associates whose primary duties
are in areas other than the sale of Notes. On all sales made by AFC, First
Capital will pay commissions to AFC in amounts agreed upon from time to time
with respect to each series of Notes for which AFC is appointed a selling agent.
In addition, First Capital will reimburse expenses of AFC incurred in the
offering and sale of Notes for which AFC has been appointed sales agent.
The Notes will not be listed on any securities exchange and the Company has
no knowledge that any securities broker will make a market for the subsequent
sale of the Notes by any purchaser.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain institutional
investors to purchase Notes 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 Notes 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 Notes 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 Notes are being sold to
underwriters, the Company shall have sold to such underwriters the total
principal amount of such Notes 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.
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.
No purchaser may, without the consent of an executive officer of First
Capital, acquire or be a registered Holder of Notes exceeding in the aggregate
of $250,000.
This offering complies with Schedule E of the NASD By-Laws.
7
<PAGE> 17
LEGAL OPINIONS
The legality of the Notes offered hereby is being passed upon for First
Capital by Thomas E. Dale or Timothy M. Hayes, each an Assistant General
Counsel, 250 E. Carpenter Freeway, Irving, Texas 75062.
EXPERTS
The consolidated balance sheets as of December 31, 1994 and 1993 and the
consolidated statements of earnings, changes in stockholder's equity, and cash
flows for each of the three years in the period ended December 31, 1994, and the
financial statement schedule, all of which are incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
8
<PAGE> 18
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Summary Financial Information......... S-2
Application of Proceeds............... S-4
Description of Notes.................. S-4
Tax Consequences and Withholding...... S-7
Plan of Distribution.................. S-9
PROSPECTUS
Available Information................. 2
Documents Incorporated by
Reference........................... 2
The Company........................... 3
Ratio of Earnings to Fixed Charges.... 3
Application of Proceeds............... 3
Description of Notes.................. 4
Plan of Distribution.................. 6
Legal Opinions........................ 8
Experts............................... 8
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
$150,000,000
LOGO
INVESTMENT NOTES
------------------------
PROSPECTUS SUPPLEMENT
------------------------
PROSPECTUS SUPPLEMENT
DATED AUGUST 24, 1995
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
