<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 17, 1995
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MARCH 17, 1995
<TABLE>
<S> <C>
$
[LOGO] SAFECO CORPORATION
% NOTES DUE
</TABLE>
----------------
Interest on the Notes is payable and of each year,
commencing , 1995. The Notes are not redeemable at any time prior to
. On and after that date, the Notes may be redeemed at the option
of the Company, in whole or in part, at a price of 100% of the principal amount
of the Notes redeemed plus accrued interest to the redemption date. The Notes
are unsecured obligations of the Company and will rank equally with all
unsecured and unsubordinated indebtedness of the Company.
The Notes will be represented by Global Securities (as defined herein)
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Interests in the Global Securities will be shown on, and transfers thereof will
be effected only through, records maintained by DTC and its participants. Except
as described in "Description of the Notes--Book-Entry Notes," Notes in
definitive form will not be issued.
The Notes will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Notes will therefore
settle in immediately available funds. All payments of principal and interest
will be made by the Company in immediately available funds. See "Description of
the Notes -- Same-Day Settlement and Payment."
----------------
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 COMMISION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
<TABLE>
<CAPTION>
INITIAL PUBLIC
OFFERING UNDERWRITING PROCEEDS TO
PRICE(1) DISCOUNT(2) COMPANY(1)(3)
---------------- ------------- ---------------------
<S> <C> <C> <C>
Per Note................................................. % % %
Total.................................................... $ $ $
<FN>
- ------------
(1) Plus accrued interest from , 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $ payable by the Company.
</TABLE>
----------------
The Notes offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that delivery of
the Notes will be ready in book-entry form only through the facilities of DTC in
New York, New York on or about March , 1995, against payment therefor in
immediately available funds.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
-----------
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH , 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
SAFECO CORPORATION
SAFECO Corporation (the "Company") is an insurance holding company with
consolidated assets in excess of $15 billion. The Company's subsidiaries engaged
in the property and casualty insurance business market a broad line of personal
and commercial insurance, including auto and homeowners insurance, workers
compensation and general liability through independent insurance agents. The
Company also provides commercial and contract bonding through its surety
operations. The Company's subsidiaries engaged in the life and health insurance
business offer individual and group insurance products, pension plans and
annuity products marketed through professional agents. The Company's
subsidiaries engaged in the real estate business invest in and manage real
property, primarily regional shopping centers. The Company's credit company
subsidiary provides commercial loans and equipment financing and leasing. Other
subsidiaries of the Company provide investment management and related services
for the SAFECO family of mutual funds and variable annuity portfolios.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be used to repay the $200
million aggregate principal amount of the Company's 10 3/4% Notes due September
15, 1995. Pending such repayment, the Company will invest the net proceeds in
short-term interest-bearing obligations.
CAPITALIZATION
The following table sets forth the short-term debt and capitalization of the
Company as of December 31, 1994, as adjusted to give effect to the issuance of
the Notes and the application of the estimated net proceeds thereof as set forth
in "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1994
-------------------------------
ACTUAL AS ADJUSTED
---------- -------------------
(MILLIONS, EXCEPT SHARE DATA)
<S> <C> <C>
Short-term debt:
SAFECO Credit borrowings...................................................... $ 432.2 $ 432.2
10 3/4% Notes due September 15, 1995.......................................... 200.0
Other notes and mortgages..................................................... 7.1 7.1
---------- --------
Total short-term debt....................................................... 639.3
---------- --------
Long-term debt:
SAFECO Credit borrowings...................................................... 78.3 78.3
% Notes due .................................................. --
Other notes and mortgages..................................................... 265.3 265.3
---------- --------
Total long-term debt........................................................ 343.6
---------- --------
Stockholder's equity:
Common Stock (no par value; 150,000,000 shares authorized; 62,951,634 issued
and outstanding)............................................................. 211.2 211.2
Retained earnings............................................................. 2,495.8 2,495.8
Net unrealized appreciation of investment securities.......................... 128.1 128.1
Net unrealized loss from foreign currency translation......................... (5.6) (5.6)
---------- --------
Total stockholders' equity.................................................. 2,829.5 2,829.5
---------- --------
Total short-term debt and capitalization.................................. $ 3,812.4 $
---------- --------
---------- --------
<FN>
- ------------
For further information, see Notes 3, 8, 9 and 11 of Notes to Financial
Statements in the Company's Annual Report (Form 10-K) for the fiscal year ended
December 31, 1994, which is incorporated by reference in the accompanying
Prospectus.
</TABLE>
S-2
<PAGE>
SUMMARY BUSINESS DESCRIPTION
The Company operates in five separate business segments through its
wholly-owned subsidiaries. The information below summarizes the business
conducted in each of the Company's segments.
PROPERTY AND CASUALTY INSURANCE
Subsidiaries engaged in the property and casualty insurance business insure
commercial, personal and surety lines of business. Coverages include automobile,
homeowners, fire and allied lines, commercial multi-peril, miscellaneous
casualty, fidelity and workers' compensation. These products are primarily sold
through independent insurance agents in nearly all states and the District of
Columbia. Approximately 47% of premiums written are in the three west coast
states of California, Washington and Oregon. Voluntary personal lines comprise
approximately 69% of 1994 gross premiums written.
In 1993, the SAFECO group of property and casualty companies ranked 26th
among groups of such companies in the United States, based on net premiums
written.
LIFE AND HEALTH INSURANCE
Subsidiaries engaged in the life and health insurance business offer
individual and group insurance products, pension plans and annuity products. The
Company's life subsidiaries' major market for the group insurance operations is
excess loss medical insurance, sold to self-insured employers. Products are
marketed through professional agents in all states and the District of Columbia.
On the basis of 1993 statutory premiums, SAFECO Life Insurance Company
ranked 47th among life insurance companies doing business in the United States.
REAL ESTATE
Subsidiaries engaged in the real estate business invest in and manage real
estate properties, primarily regional shopping centers. These subsidiaries also
offer real estate services, including property management, design and
construction management and tenant leasing services.
CREDIT
SAFECO Credit Company provides loans and equipment financing and leasing to
commercial business. At December 31, 1994, approximately 13% of the outstanding
loans and leases of SAFECO Credit Company consisted of loans to other members of
the SAFECO group.
ASSET MANAGEMENT
The asset management subsidiaries serve as principal underwriter, transfer
agent and investment advisor for the SAFECO family of mutual funds and as
investment advisor to outside managed accounts. Total assets under management
including the SAFECO family of mutual funds, variable annuity portfolios and
outside managed accounts were approximately $2.5 billion at December 31, 1994.
S-3
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
The following summary financial information for the years ended and as of
December 31, 1994, 1993, 1992, 1991 and 1990 has been derived from previously
published audited consolidated financial statements of the Company, which have
been audited and reported upon by Ernst & Young LLP, independent auditors. The
summary financial information should be read in conjunction with, and is
qualified in its entirety by reference to, the consolidated financial statements
from which it has been derived and the accompanying notes thereto incorporated
by reference in the accompanying Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1994 1993(1) 1992 1991 1990
---------- -------- ------- ------- -------
(IN MILLIONS EXCEPT PER SHARE DATA, OTHER
DATA AND RATIO OF EARNINGS TO FIXED CHARGES)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA:
Insurance:
Property and Casualty Earned
Premiums........................... $ 2,053 $ 1,930 $ 1,754 $ 1,636 $ 1,664
Life and Health Premiums and other
Revenue............................ 277 306 329 333 312
Real Estate (2)....................... 107 78 187 274 255
Finance............................... 54 50 48 47 39
Asset Management...................... 15 13 13 11 9
Net Investment Income................. 992 952 903 847 765
Realized Investment Gain.............. 39 188 61 35 9
---------- -------- ------- ------- -------
Total Revenues...................... 3,537 3,517 3,295 3,183 3,053
---------- -------- ------- ------- -------
Losses, Adjustment Expense and Policy
Benefits............................. 2,202 2,026 1,981 1,901 1,820
Commissions........................... 394 362 343 317 333
Personnel Costs....................... 225 226 234 251 238
Interest.............................. 69 59 64 71 69
Dividends to Policyholders............ 23 21 16 12 12
Other................................. 234 246 254 314 277
---------- -------- ------- ------- -------
Total Expenses...................... 3,147 2,940 2,892 2,866 2,749
---------- -------- ------- ------- -------
Income Before Income Taxes............ 390 577 403 317 304
Provision for Income Taxes............ 76 151 92 57 26
---------- -------- ------- ------- -------
Net Income............................ $ 314 $ 429 $ 311 $ 260 $ 278
---------- -------- ------- ------- -------
---------- -------- ------- ------- -------
CONSOLIDATED BALANCE SHEET DATA:
Investments........................... $ 13,467 $12,641 $11,477 $10,272 $ 9,052
Cash.................................. 64 68 73 60 41
Finance Receivables................... 619 548 495 427 349
Premiums and Other Service Fees
Receivable........................... 419 401 336 327 326
Total Assets........................ 15,902 14,807 13,391 12,114 10,683
Insurance Policy Liabilities.......... 11,277 10,329 9,367 8,416 7,308
Notes and Mortgages Payable........... 983 918 839 824 784
Stockholders' Equity.................. 2,829 2,774 2,448 2,221 1,976
NUMBER OF SHARES OUTSTANDING:
Period End............................ 63.0 62.9 62.8 62.7 62.7
Average............................... 63.0 62.9 62.8 62.7 63.1
PER SHARE DATA:
Net Income............................ $ 4.99 $ 6.82 $ 4.96 $ 4.14 $ 4.41
Dividends to Common Stockholders...... 1.88 1.72 1.56 1.42 1.28
Stockholders' Equity.................. 44.95 44.09 38.97 35.40 31.50
SEGMENT DATA:
Income (Loss), Net of Income Taxes,
Before Realized Gain:
Property and Casualty............... $ 193 $ 217 $ 187 $ 146 $ 184
Life and Health..................... 85 77 76 80 78
Real Estate......................... 7 6 6 6 6
Credit.............................. 7 7 6 6 4
Asset Management.................... 4 4 4 3 3
Corporate........................... )(7 (4) (8) (4) (3)
---------- -------- ------- ------- -------
Total............................... 289 307 271 237 272
Realized Gain......................... 25 119 40 23 6
---------- -------- ------- ------- -------
Net Income............................ $ 314 $ 429 $ 311 $ 260 $ 278
---------- -------- ------- ------- -------
---------- -------- ------- ------- -------
OTHER DATA:
Property and Casualty Combined
Ratio................................ 103.8%(3) 99.5% 104.1% 108.6% 107.2%
Ratio of Property and Casualty
Premiums
Written to Policyholder Surplus..... 1.4:1 1.3:1 1.3:1 1.4:1 1.6:1
RATIO OF EARNINGS TO FIXED CHARGES...... 6.3 10.1 7.0 5.3 5.1
<FN>
- -----------------
(1) Net income for 1993 reflects an increase of $2.9 million as a result of the
cumulative effects of changes in accounting for income taxes and
postretirement benefits.
(2) Revenues for 1992 and earlier years include the results of the hospital
operating subsidiary which was sold in 1992.
(3) Excluding losses relating to the Los Angeles earthquake and premiums paid
to reinstate catastrophe reinsurance, the 1994 combined ratio would have
been 97.8%.
</TABLE>
S-4
<PAGE>
SELECTED DEVELOPMENTS
Net income for the year ended December 31, 1994 was $314.4 million, compared
with $428.8 million for 1993. Excluding realized gain from investments, income
was $288.5 million in 1994, compared with $307.0 million in 1993. The results
for 1994 were adversely impacted by the Los Angeles earthquake. In addition, the
realized gain from investments in 1993 was unusually high as the result of
involuntary calls and redemptions in the bond portfolios because of declining
interest rates during 1993. As interest rates rose in 1994, calls and
redemptions decreased significantly.
Property and casualty operations for 1994 produced pretax income of $206.1
million before realized gain from investments, compared with $287.5 million
(excluding the $40.0 million California Proposition 103 settlement) in 1993. The
1994 results include $90.0 million in net losses from the Los Angeles
earthquake. In addition, $23.3 million was incurred to reinstate reinsurance
coverage for a second catastrophe in the event it occurred in 1994, and $9.0
million was incurred to pay for reinsurance coverage for a third catastrophe in
the event it occurred in 1994. The loss from underwriting was $77.3 million for
1994, compared with a profit of $9.8 million in 1993. If losses relating to the
Los Angeles earthquake and premiums paid to reinstate catastrophe reinsurance
were excluded, the Company would have had an underwriting profit of $45.0
million for 1994 for its property and casualty operations, resulting in a
combined ratio of 97.8%.
The Company's catastrophe property reinsurance program for 1995 covers 90%
of $282 million of single event losses in excess of a $75 million retention. In
the event of a substantial catastrophe, the Company would, therefore, retain the
first $75 million of losses, 10% of the next $282 million and all losses in
excess of $357 million. The 1995 catastrophe reinsurance contract includes a
provision for one reinstatement for a second catastrophe event in 1995 at
current rates. Both the retention level and the aggregate coverage limit for
1995 are higher than in prior years.
For additional information, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" in the Company's
Annual Report (Form 10-K) for the year ended December 31, 1994, which is
incorporated by reference in the accompanying Prospectus.
DESCRIPTION OF THE NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE NOTES OFFERED
HEREBY (REFERRED TO IN THE ACCOMPANYING PROSPECTUS AS THE "OFFERED SECURITIES")
SUPPLEMENTS AND, TO THE EXTENT INCONSISTENT THEREWITH, REPLACES, INSOFAR AS SUCH
DESCRIPTION RELATES TO THE NOTES, THE DESCRIPTION OF THE DEBT SECURITIES SET
FORTH IN THE PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE.
CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN TO
THEM IN THE PROSPECTUS.
GENERAL
The Notes are unsecured and unsubordinated obligations of the Company, will
rank PARI PASSU with all other unsecured and unsubordinated indebtedness of the
Company, and will mature on . The Notes will bear interest at the
rate per annum shown on the cover page of this Prospectus Supplement, payable
semi-annually on and of each year (each an "Interest Payment
Date") commencing , 1995 to the Person in whose name the Note (or
any predecessor Note) is registered at the close of business on and
, as the case may be, next preceding such Interest Payment Date.
OPTIONAL REDEMPTION
The Notes will not be redeemable by the Company prior to . On
and after that date, the Notes may be redeemed at the option of the Company, as
a whole or in part, upon not less than 30 nor more than 60 days' notice mailed
to each Holder of Notes to be redeemed at his or her address appearing on the
Securities Register, at a price of 100% of the principal amount of the Notes
redeemed plus accrued interest to the date fixed for redemption.
S-5
<PAGE>
BOOK-ENTRY NOTES
The Notes will be issued in the form of global securities (the "Global
Securities"). The Global Securities will be deposited with, or on behalf of, DTC
(the "Depositary"), and registered in the name of the Depositary or a nominee
thereof. Unless and until exchanged in whole or in part for Notes in definitive
form, no Global Security may be transferred except as a whole by the Depositary
to a nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
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. The Depositary was created to hold securities of its participants and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. The Depositary's participants include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to the Depositary are on file with the
Securities and Exchange Commission.
A further description of the Depositary's procedures with respect to Global
Securities is set forth in the accompanying Prospectus under "Description of the
Debt Securities -- Global Securities."
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds, so long as DTC continues to make its
Same-Day Funds Settlement System available to the Company.
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 DTC's Same-Day Funds Settlement System, and secondary market
trading activity in the Notes will therefore be required by DTC to 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.
S-6
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase, the principal amount of
the Notes set forth oppposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
- ---------------------------------------------------------------------------------------------- -----------------------
<S> <C>
Goldman, Sachs & Co...........................................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................................................................
-----------------------
Total..................................................................................... $
-----------------------
-----------------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Notes, if any are
taken.
The Underwriters propose 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 % of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
% of the principal amount of the Notes to certain brokers and dealers. After
the Notes are released for sale to the public, the public offering price and
other selling terms may from time to time be varied by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend to
make a market in the Notes but are 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 the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
S-7
<PAGE>
<TABLE>
<S> <C>
[LOGO] SAFECO CORPORATION
$200,000,000
</TABLE>
DEBT SECURITIES
------------
SAFECO Corporation (the "Company") may from time to time offer Debt
Securities consisting of debentures, notes and/or other unsecured evidences of
indebtedness in one or more series at an aggregate initial offering price not to
exceed $200,000,000. The Debt Securities may be offered as separate series in
amounts, at prices and on terms to be determined at the time of sale. The
accompanying Prospectus Supplement sets forth with regard to the Debt Securities
in respect of which this Prospectus is being delivered the title, aggregate
principal amount, denominations, maturity, rate, if any (which may be fixed or
variable), and time of payment of any interest, any terms for redemption at the
option of the Company or the holder, any terms for sinking fund payments, any
listing on a securities exchange and the initial public offering price and any
other terms in connection with the offering and sale of such Debt Securities.
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, or may be a group of underwriters represented by firms
including one or more of such firms. Such firms may also act as agents. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Debt Securities in respect of which this
Prospectus is being delivered, the principal amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or agents.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
The date of this Prospectus is March 17, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission") relating to its business, financial statements and
other matters. Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, DC 20549;
and at the Commission's regional offices at 7 World Trade Center, New York, NY
10048; and Northwestern Atrium Center, 500 W. Madison Street, Chicago, IL 60661.
Copies of such material can also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, DC 20549 at prescribed
rates. This Prospectus does not contain all information set forth in the
Registration Statement and the exhibits thereto which the Company has filed with
the Commission under the Securities Act of 1933 (the "Securities Act"), and to
which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company filed with the Commission are
incorporated herein by reference:
Annual Report (Form 10-K) for its fiscal year ended December 31, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein, or in the
accompanying Prospectus Supplement, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein or in the accompanying Prospectus
Supplement, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will furnish without charge to each person to whom a copy of
this Prospectus is delivered, upon request, a copy of any of the documents
described above, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests should be
directed to George Yonker, Vice President -- Finance, SAFECO Corporation, SAFECO
Plaza, Seattle, Washington 98185, telephone number (206) 545-5537.
SAFECO CORPORATION
The Company is an insurance holding company with consolidated assets in
excess of $15 billion. The Company's subsidiaries engaged in the property and
casualty insurance business market a broad line of personal and commercial
insurance, including auto and homeowners insurance, workers compensation and
general liability, through independent insurance agents in nearly all states and
the District of Columbia. Such subsidiaries also provide commercial and contract
bonding through their surety operations. The Company's subsidiaries engaged in
the life and health insurance business offer individual and group insurance
products, pension plans and annuity products marketed through professional
independent agents in all states and the District of Columbia. The Company's
subsidiaries engaged in the real estate business invest in and manage real
property, primarily regional shopping centers. The Company's credit company
subsidiary provides commercial loans and equipment financing and leasing. Other
subsidiaries of the Company provide investment management and related services
for the SAFECO family of mutual funds and variable annuity portfolios.
The Company is a Washington corporation with its principal executive offices
located at SAFECO Plaza, Seattle, Washington 98185 (telephone (206) 545-5000).
2
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SAFECO Corporation (Consolidated).................................. 6.3 10.1 7.0 5.3 5.1
</TABLE>
The ratios of earnings to fixed charges are computed for the Company and its
consolidated subsidiaries. Earnings consist of income from continuing operations
before federal income taxes and before fixed charges excluding capitalized
interest. Fixed charges consist of interest expense, capitalized interest,
amortization of debt expense, and the portion of rental expense deemed
representative of the interest factor.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net proceeds to
be received for the issuance and sale of the Debt Securities will be used for
general corporate purposes which may include repayment and/or replacement of a
portion of the Company's indebtedness outstanding at the time of issuance of the
Debt Securities. The indebtedness which may be repaid and/or replaced may
include the 10 3/4% Notes of SAFECO Corporation due September 1995.
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will be issued under an Indenture, dated as of March 1,
1995 (the "Indenture"), among SAFECO, SAFECO Credit Company, Inc. and The Chase
Manhattan Bank, N.A., as Trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
statements under this caption are brief summaries of certain provisions of the
Indenture, do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all of the provisions of the Indenture,
including the definitions therein of certain terms. Wherever particular Sections
of the Indenture or terms that are defined in the Indenture are referred to
herein or in a Prospectus Supplement, it is intended that such Sections or
defined terms shall be incorporated by reference herein or therein, as the case
may be.
The Debt Securities will be issued solely by the Company, and may be issued
from time to time in one or more series. The particular terms of each series of
Debt Securities offered by any Prospectus Supplement or Prospectus Supplements
will be described in a Prospectus Supplement or Prospectus Supplements relating
to such series.
GENERAL
The Debt Securities offered pursuant to this Prospectus will be limited to
$200,000,000 aggregate principal amount (or if any Debt Securities are issued at
original issue discount, such greater amount as shall result in proceeds of
$200,000,000 to the Company). Debt Securities may be issued under the Indenture
from time to time in separate series up to the aggregate amount from time to
time authorized by the Company for each series. The Debt Securities will be
unsecured obligations of the Company and will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the Debt Securities to be offered pursuant to such
Prospectus Supplement or Prospectus Supplements ("Offered Securities"): (1) the
title of the Offered Securities; (2) any limit upon the aggregate principal
amount of the Offered Securities; (3) the date or dates on which the principal
of the Offered Securities is payable; (4) the rate or rates (or, if subject to
adjustment, the manner for determining such rates) at which the Offered
Securities shall bear interest, if any, the date or dates from which any such
interest shall accrue, the Interest Payment Dates on which any such interest
shall be payable, and the Regular Record Date for any interest payable on the
Interest Payment Date; (5) the place or places where, subject to the terms of
the Indenture as described below under "Payment and Paying Agents," the
principal of and premium, if any, and interest on the Offered Securities will be
payable and where, subject to the terms of the Indenture as described below
under "Denominations, Registration and
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Transfer," the Offered Securities may be presented for registration of transfer
or exchange and the place or places where notices and demands to or upon the
Company in respect of the Offered Securities and the Indenture may be made
("Place of Payment"); (6) the period or periods within which, the price or
prices at which and the terms and conditions upon which Offered Securities may
be redeemed, in whole or in part, at the option of the Company; (7) the
obligation or the right, if any, of the Company to redeem, purchase or repay the
Offered Securities prior to the Stated Maturity pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof or of the Company and
the period or periods within which, the price or prices at which and the terms
and conditions upon which the Offered Securities shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation; (8) the denominations
in which any Offered Securities shall be issuable if other than denominations of
$1,000 and any integral multiple thereof; (9) any addition to, or modification
or deletion of, any Event of Default or any covenant of the Company specified in
the Indenture with respect to the Offered Securities; (10) any index or indices
used to determine the amount of payments of principal of and premium, if any, on
the Offered Securities and the manner in which such amounts will be determined;
(11) if other than the principal amount thereof, the portion of the principal
amount of the Offered Securities which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to the Indenture; (12) whether the
Offered Securities will be issued as Global Securities; and (13) any other terms
of the Offered Securities not inconsistent with the provisions of the Indenture.
(Section 301.)
One or more series of Offered Securities may be issued as discounted Debt
Securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
The covenants of the Company under the Indenture, as described below, will
not necessarily afford Holders of the Debt Securities protection in the event of
a highly leveraged transaction involving the Company, such as a leveraged
buyout.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable only in registered form without coupons
in such denominations as shall be specified in the Prospectus Supplement for the
Offered Securities. Unless Debt Securities are issued as Global Securities as
described below under "Global Securities," the Debt Securities of any series
will be exchangeable for other Debt Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations.
(Section 305.)
Unless Debt Securities are issued as Global Securities as described below
under "Global Securities," the Debt Securities may be presented for exchange as
provided above, and may be presented for registration of transfer (with the form
of transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the Securities Registrar or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected at such time as the Securities Registrar or such transfer
agent, as the case may be, is satisfied with the documents of title and identity
of the person making the request. The Company has appointed the Trustee as
Securities Registrar. (Section 305.) If a Prospectus Supplement refers to any
transfer agents (in addition to the Securities Registrar) initially designated
by the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, provided that the
Company maintains a transfer agent in each Place of Payment for such series. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities. (Section 1002.)
In the event of any redemption the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before any selection of
Debt Securities of that series to be redeemed and ending at the close of
business
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on the day of mailing of the relevant notice of redemption or (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed in
part. (Section 305.)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to such
series. The Company anticipates that the following provisions will generally
apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ("Participants") or persons that may
hold interests through Participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons other than Participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have any of
the individual Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the Indenture governing
such Debt Securities.
Payments of principal, premium, if any, and interest, if any, on individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the Trustee for such Debt Securities, any
Paying Agent, nor the Securities Registrar for such Debt Securities will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Security for such Debt Securities as shown on the records of such
Depositary or its nominee. The
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Company also expects that payments by Participants to owners of beneficial
interests in such Global Security held through such Participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name." Such payments will be the responsibility of such Participants.
The Company understands that under existing industry practices, if the
Company requests any action of Holders or an owner of a beneficial interest in
such Global Security desires to give any notice or take any action a Holder is
entitled to give or take under the Indenture, the Depositary will authorize the
Participants to give such notice or take such action, and Participants would
authorize beneficial owners owning through such Participants to give such notice
or take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Further, if the Company so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing Debt
Securities of such series may, on terms acceptable to the Company, Trustee and
the Depositary for such Global Security, receive individual Debt Securities of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and integral
multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Debt Securities will
be made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment of
any interest may be made (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Securities Register or (ii)
by transfer to an account maintained by the Person entitled thereto as specified
in the Securities Register, provided that proper transfer instructions have been
received by the Regular Record Date. (Sections 301, 307, 1002.) Unless otherwise
indicated in an applicable Prospectus Supplement, payment of any installment of
interest on Debt Securities will be made to the Person in whose name such Debt
Security is registered at the close of business on the Regular Record Date of
such interest, except in the case of Defaulted Interest. (Section 307.)
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to Offered Securities.
Any other Paying Agents other than those initially designated by the Company for
the Offered Securities will be named in an applicable Prospectus Supplement. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that the Company will be required to maintain a
Paying Agent in each Place of Payment for each series of Debt Securities.
(Section 1002.)
All moneys paid by the Company to a Paying Agent for the payment of
principal of (and premium, if any) or interest on any Debt Security which remain
unclaimed at the end of two years after such
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principal, premium or interest shall have become due and payable will be repaid
to the Company and the Holder of such Debt Security will thereafter look only to
the Company for payment thereof as a general unsecured creditor. (Section 1003.)
CERTAIN RESTRICTIONS
For the purposes of the restrictions hereinafter summarized, the term
"Restricted Subsidiaries" includes only SAFECO Credit Company, Inc., SAFECO
Insurance Company of America, General Insurance Company of America, First
National Insurance Company of America, SAFECO National Insurance Company, SAFECO
Life Insurance Company, any subsidiary of any of the foregoing except SAFECO
Management Corporation and GSL Corporation, and any subsidiary of the Company
(including a subsidiary of a subsidiary) which shall hereafter succeed by merger
or otherwise to a major part of the business of one of the six subsidiaries
named above. (Section 101.)
LIMITATIONS ON MORTGAGES AND LIENS. The Company will not be permitted to
create, assume, incur, guarantee, or permit to exist any indebtedness secured by
a pledge, lien or other encumbrance ("liens") on any of its property or assets
without effectively providing that the Debt Securities (and, if the Company so
elects, any other indebtedness ranking on a parity with the Debt Securities)
shall be equally and ratably secured with any such indebtedness, except that the
foregoing shall not apply to (a) liens in existence on the date of the
Indenture, (b) liens on real estate (including those existing on property at the
time of acquisition) in any amount not exceeding 100% of the fair value of the
property at the time of creation of such indebtedness, (c) liens arising from
the acquisition of a business as a going concern (whether by merger, acquisition
of a controlling stock interest, acquisition of assets or otherwise) or to which
assets acquired by the Company in partial or complete satisfaction of secured
indebtedness are subject, (d) liens to secure extensions, renewals and
replacements of indebtedness secured by any of the liens referred to in (a), (b)
and (c) above, without increase in the amount of such indebtedness, and (e)
certain mechanics, landlords, tax or other statutory liens, including liens and
deposits required or provided for under state insurance laws and similar
regulatory statutes. (Section 1009.)
LIMITATIONS ON SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES. Neither
the Company nor any Restricted Subsidiary will be permitted to issue, sell,
transfer or dispose of (except to a Restricted Subsidiary or the Company)
capital stock of a Restricted Subsidiary, unless the entire capital stock of
such Subsidiary at the time owned by the Company and its Restricted Subsidiaries
is disposed of at the same time for a consideration of cash or property, which
in the opinion of the Board of Directors of the Company is at least equal to the
fair value of such capital stock. (Section 1008.)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company shall not consolidate with or merge into any other corporation
or convey or transfer its properties and assets substantially as an entirety to
any Person, and no Person shall consolidate with or merge into the Company or
convey or transfer its properties and assets substantially as an entirety to the
Company, unless: (i) in case the Company consolidates with or merges into
another corporation or conveys or transfers its properties and assets
substantially as an entirety to any Person, the successor corporation is
organized under the laws of the United States of America or any state or the
District of Columbia, and the successor corporation assumes the Company's
obligations on the Debt Securities issued under the Indenture; (ii) immediately
after giving effect thereto, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and (iii) certain other conditions are met.
(Sections 801 and 802.)
The Company shall not lease its properties and assets substantially as an
entirety to any Person. (Section 803.)
MODIFICATION AND WAIVER
Modification and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of 66 2/3% in aggregate principal
amount of the Outstanding Debt Securities of each series affected thereby;
provided, however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected thereby: (a)
change the Stated
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Maturity of the principal of, or any installment of interest on, any Outstanding
Debt Security; (b) reduce the principal amount of, or interest on, any
Outstanding Debt Security; (c) change the place or currency of payment of
principal or interest on any Outstanding Debt Security; (d) impair the right to
institute suit for the enforcement of any payment on or with respect to any
Outstanding Debt Security after the Stated Maturity; or (e) reduce the
percentage in principal amount of Outstanding Debt Securities of any series, the
consent of the Holders of which is required for modification or amendment of the
Indenture, for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults. (Section 902.)
The Company may obtain a waiver of compliance with certain restrictive
covenants with respect to the Debt Securities of a series if the Holders of a
66 2/3% in principal amount of the Outstanding Debt Securities of each series
affected thereby and 66 2/3% in aggregate principal amount of the Outstanding
Debt Securities of all series consent to such waiver. (Section 1010.) The
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series may on behalf of the Holders of all Debt Securities of
that series waive any past default under the Indenture with respect to that
series of Debt Securities, except a default in the payment of the principal of,
or any interest on, any Debt Security of that series or in respect of a
provision which under the Indenture cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of that series affected.
(Section 513.)
EVENTS OF DEFAULT
The Indenture provides that the following shall constitute Events of
Default: (i) default for 30 days in the payment of any interest when due; (ii)
default in the payment of principal; (iii) default in the performance of any
other covenant in the Indenture for 60 days after written notice; (iv) a failure
to pay when due, or a default resulting in the acceleration of maturity of, any
other indebtedness for borrowed money of the Company or a Restricted Subsidiary
in which the principal amount of any such indebtedness together with the
principal amount of any other such indebtedness which is presently in Payment
Default or the maturity of which has been so accelerated, aggregates $10 million
or more, without such acceleration having been rescinded, stayed or annulled, or
such indebtedness having been discharged or, in the case of indebtedness
contested in good faith by the Company, a bond, letter of credit, escrow deposit
or other cash equivalent in an amount sufficient to discharge such indebtedness
having been set aside, within 10 days after written notice of default is given
to the Company; and (v) certain events in bankruptcy, insolvency or
reorganization. (Section 501.) The Company is required to furnish the Trustee
annually with a statement as to the fulfillment by the Company of its
obligations under the Indenture. (Section 1006.) The Indenture provides that the
Trustee may withhold notice to the Holders of the Debt Securities of any default
(except in payment of principal or interest on the Debt Securities) if it
considers it in the interest of the Holders to do so. (Section 602.)
If an Event of Default with respect to Outstanding Debt Securities of any
series occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount to be due and payable
immediately, by notice in writing to the Company (and to the Trustee if given by
the Holders), and upon any such declaration such principal shall become
immediately due and payable. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of Outstanding Debt Securities of that
series may, subject to certain conditions, rescind and annul such acceleration.
(Section 502.)
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing 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 of the Holders, unless such
Holders shall have offered to the Trustee reasonable security or indemnity.
(Section 603.) Subject to such provisions for the security or indemnification of
the Trustee, the Holders of a majority in principal
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amount of the Outstanding Debt Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or powers conferred on the
Trustee with respect to the Debt Securities of that series. (Section 512.)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series and unless also the Holders of at least 25% in principal amount
of the Outstanding Debt Securities of that series shall have made written
request, and offered reasonable security or indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series a direction inconsistent with such request, and the
Trustee shall have failed to institute such proceeding within 60 days. (Section
507.) However, the Holder of any Debt Security will have an absolute right to
receive payment of the principal of and any interest on such Debt Security on or
after the due dates expressed in such Debt Security and to institute a
proceeding for the enforcement of any such payment. (Section 508.)
SATISFACTION AND DISCHARGE OF THE INDENTURE
The Indenture provides that when, among other things, all Debt Securities
not previously delivered to the Trustee for cancellation (i) have become due and
payable, or (ii) will become due and payable at their Stated Maturity within one
year and the Company deposits or causes to be deposited with the Trustee as
trust funds in trust for the purpose an amount in money sufficient to pay and
discharge the entire indebtedness on the Debt Securities not previously
delivered to the Trustee for cancellation, for the principal and interest to the
date of the deposit or to the Stated Maturity, as the case may be, then the
Indenture will cease to be of further effect (except as to the Company's
obligations to compensate, reimburse and indemnify the Trustee pursuant to the
Indenture and certain other obligations), and the Company will be deemed to have
satisfied and discharged the Indenture. (Section 401.)
CONCERNING THE TRUSTEE
The Chase Manhattan Bank, N.A. is trustee under the Indenture, dated as of
September 12, 1985, relating to the Company's 10 3/4% Notes due September 15,
1995, and under the Indenture dated as of December 19, 1990 relating to the
Medium-Term Notes of the Company and SAFECO Credit Company, Inc. due at various
dates to January 2003, and is fiscal and paying agent and registrar and transfer
agent for such issues.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, or a group of underwriters represented by firms including
one or more of such firms. Such firms may also act as agents.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they act
as agents. Underwriters, dealers and agents that participate in the distribution
of Debt Securities may be deemed to be underwriters, and any discounts or
commissions received by them from the Company and any profit on the resale of
Debt Securities by them may be deemed to be underwriting discounts and
commissions, under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Company will be
described in the Prospectus Supplement.
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Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as agents for the Company to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Offered Securities shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibility in respect of the validity or performance of such
contracts.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Foster Pepper & Shefelman, Seattle, Washington. Certain matters will be
passed upon for any underwriters or agents by O'Melveny & Myers. O'Melveny &
Myers may rely on the opinion of Foster Pepper & Shefelman as to matters of
Washington law and the latter may rely on the opinion of the former as to
matters of New York law.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1994, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH
INFORMATION.
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TABLE OF CONTENTS
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PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
SAFECO Corporation............................. S-2
Use of Proceeds................................ S-2
Capitalization................................. S-2
Summary Business Description................... S-3
Summary Consolidated Financial and Other
Data.......................................... S-4
Selected Developments.......................... S-5
Description of the Notes....................... S-5
Underwriting................................... S-7
PROSPECTUS
Available Information.......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
SAFECO Corporation............................. 2
Ratio of Earnings to Fixed Charges............. 3
Use of Proceeds................................ 3
Description of the Debt Securities............. 3
Plan of Distribution........................... 9
Legal Matters.................................. 10
Experts........................................ 10
</TABLE>
$
SAFECO CORPORATION
% NOTES DUE
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
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