<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-67139
WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT. THIS
PROSPECTUS SUPPLEMENT AND A BASE PROSPECTUS ARE PART OF AN EFFECTIVE
REGISTRATION STATEMENT FILED WITH THE SEC. THIS PROSPECTUS SUPPLEMENT AND THE
BASE PROSPECTUS ARE NOT OFFERS TO SELL THESE SECURITIES OR OUR SOLICITATION OF
YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THAT WOULD NOT BE
PERMITTED OR LEGAL.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 10, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT
April , 2000
(To Prospectus -- March 30, 2000)
[LOGO]
THE ST. PAUL COMPANIES, INC.
$300,000,000
% SENIOR NOTES DUE 2010
----------------------------------------------------------------------
<TABLE>
<S> <C>
THE COMPANY: THE SENIOR NOTES AND THE OFFERING:
The St. Paul Companies, Inc. - Maturity: April 15, 2010
385 Washington Street - Interest Rate: %
St. Paul, Minnesota 55102 - Interest Payments: Semi-annually on
(651) 310-7911 April 15 and October 15, commencing on
October 15, 2000
- Closing: April , 2000
</TABLE>
<TABLE>
- ----------------------------------------------------------------------------------------
PER SENIOR NOTE TOTAL
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Public offering price:............................. % $
Underwriting fees:.................................
Net proceeds to Company:...........................
- ----------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED ANY OF THE SECURITIES OFFERED BY THIS
PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ATTACHED PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We expect that the Senior Notes will be ready for delivery in book-entry form
through The Depository Trust Company, on or about April , 2000.
- --------------------------------------------------------------------------------
DONALDSON, LUFKIN & JENRETTE
LEHMAN BROTHERS
THE WILLIAMS CAPITAL GROUP, L.P.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
The St. Paul Companies, Inc................................. S-3
Use of Proceeds............................................. S-4
Capitalization.............................................. S-5
Ratio of Earnings to Fixed Charges.......................... S-6
Selected Consolidated Financial Information................. S-7
Description of Senior Notes................................. S-8
Underwriting................................................ S-11
PROSPECTUS
The St. Paul................................................ 2
Ratios of Earnings to Fixed Charges of the Company.......... 2
Use of Proceeds............................................. 2
About This Prospectus....................................... 2
Description of Debt Securities We May Offer................. 3
Plan of Distribution........................................ 12
Validity of Debt Securities................................. 13
Experts..................................................... 13
Where You Can Find More Information......................... 13
</TABLE>
S-2
<PAGE>
THE ST. PAUL COMPANIES, INC.
GENERAL DESCRIPTION. The St. Paul Companies, Inc. is incorporated as a
general business corporation under the laws of the State of Minnesota. We
constitute one of the oldest insurance organizations in the United States,
dating back to 1853. We are a management company principally engaged, through
our subsidiaries, in providing commercial property-liability and life insurance,
and reinsurance products and services worldwide. We also have a presence in the
asset management industry through our 79% majority ownership of The John Nuveen
Company. As a management company, we oversee the operations of our subsidiaries
and provide them with capital, management and administrative services. At
December 31, 1999, we had total assets of $38.9 billion and total equity of
$6.5 billion. At March 1, 2000, we employed approximately 12,000 persons. Based
on 1998 net premiums written as reported by A.M. Best Company, we are the
4th largest commercial insurance company in the U.S. Based on total revenues, we
rank No. 204 on the 1999 Fortune 500 list of the largest companies in the United
States.
STRATEGIC TRANSACTIONS. We took four major actions in 1999 consistent with
our strategy of focusing our resources on specialty commercial and professional
property-liability insurance lines. First, we completed the sale of our standard
personal insurance underwriting operations to a subsidiary of Metropolitan Life
Insurance Company. Second, we reached a definitive agreement to sell our
nonstandard auto insurance operations to Prudential Insurance Company of
America, in a transaction expected to be completed in the second quarter of
2000. Third, we reached a definitive agreement to purchase MMI Companies, Inc.,
a provider of insurance products and consulting services to the healthcare
industry, in a transaction expected to be finalized in the second quarter of
2000. Fourth, we agreed to purchase Pacific Select Property Insurance Company,
which will expand our earthquake risk underwriting capabilities in California,
in a transaction completed in the first quarter of 2000.
EXPENSE SAVINGS. In 1999 we substantially completed the integration of
USF&G Corporation, which we acquired in April 1998, into our operations. By the
end of 1999 we had realized pretax annual expense savings of approximately
$260 million (as measured against the combined 1997 pre-merger expenses of the
two companies) as a result of the merger and the subsequent restructuring of our
commercial insurance underwriting segments in late 1998. In addition, in the
third quarter of 1999, we announced a cost reduction program designed to enhance
our efficiency in the highly-competitive property-liability insurance
marketplace. We recorded a pretax charge to earnings of $60 million in 1999
related to this program, consisting of $33 million of occupancy-related
expenses, $25 million of employee-related expenses related to the anticipated
elimination of approximately 700 positions, and $2 million of equipment charges.
Through December 31, 1999, approximately 480 employees had been terminated under
this plan.
REALIGNMENT OF PRIMARY INSURANCE OPERATIONS. In the fourth quarter of 1999,
we realigned our primary property-liability insurance operations in order to
further streamline our organization and ease agent and broker access to our
products and services. We created a Global Specialty Practices organization,
encompassing our Specialty Commercial and Surety business segments, which has
worldwide responsibility for product development, strategic planning, pricing
and risk selection for our specialty commercial insurance operations.
S-3
<PAGE>
BUSINESS SEGMENTS. Our property-liability insurance operations, composed of
five distinct underwriting business segments and an investment operations
segment, accounted for 89%, 91% and 92% of consolidated revenues from continuing
operations in 1999, 1998 and 1997, respectively. Our life insurance segment,
Fidelity and Guaranty Life Insurance Company and subsidiaries, accounted for 6%
of revenues in 1999 and 5% of revenues in 1998 and 1997, with Nuveen accounting
for virtually all of the remaining revenues in each year.
Additional information about us is included in the documents we filed with
the SEC (including our Annual Report on Form 10-K for the year ended
December 31, 1999, filed with the SEC on March 30, 2000), which are incorporated
by reference. See "Where You Can Find More Information" in the accompanying
prospectus.
Our principal and executive offices are located at 385 Washington Street,
St. Paul, Minnesota 55102, and our telephone number is (651) 310-7911.
USE OF PROCEEDS
We intend to use the net proceeds of the offering to repay commercial paper.
As of March 31, 2000, we had $495 million of commercial paper outstanding,
bearing interest at a weighted average rate of interest of 6.06%. The commercial
paper was issued for general corporate purposes, including financing repurchases
of our common shares and of company-obligated mandatorily redeemable preferred
securities of subsidiaries.
S-4
<PAGE>
CAPITALIZATION
The table below sets forth the actual consolidated capitalization as of
December 31, 1999, and as adjusted to reflect our application of the net
proceeds from this offering in the manner described in "Use of Proceeds".
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
------------------------
ACTUAL AS ADJUSTED
(IN MILLIONS)
<S> <C> <C>
Debt:
Senior Notes offered hereby............................... $ -- $ 300.0
Medium-term notes......................................... 616.9 616.9
Commercial paper (1)...................................... 400.7 102.9
8 3/8% senior notes....................................... 149.8 149.8
Zero coupon convertible notes............................. 94.1 94.1
7 1/8% senior notes....................................... 79.9 79.9
Variable rate borrowings.................................. 63.8 63.8
Floating rate notes (2)................................... 45.7 45.7
Real estate mortgage debt................................. 15.5 15.5
-------- --------
Total debt.............................................. 1,466.4 1,468.6
-------- --------
Company-obligated mandatorily redeemable preferred
securities of subsidiaries (3)............................ 424.9 424.9
-------- --------
Preferred shareholders' equity:
Series B convertible preferred stock...................... 129.0 129.0
Guaranteed SOP obligation................................. (104.7) (104.7)
-------- --------
Total preferred shareholders' equity.................... 24.3 24.3
-------- --------
Common shareholders' equity:
Common stock.............................................. 2,079.3 2,079.3
Retained earnings......................................... 3,827.2 3,827.2
Accumulated other comprehensive income:
Unrealized appreciation of investments.................. 568.5 568.5
Unrealized loss on foreign currency translation......... (27.1) (27.1)
-------- --------
Total common shareholders' equity..................... 6,447.9 6,447.9
-------- --------
Total capitalization.................................. $8,363.5 $8,365.7
======== ========
</TABLE>
- --------------------------
(1) As of March 31, 2000, we had $495 million of commercial paper outstanding.
(2) These notes were paid in full in February 2000.
(3) Upon the close of our purchase of MMI Companies, Inc. ("MMI"), expected to
be completed in the second quarter of 2000, we will assume MMI's capital
securities, which totaled $119.0 million at December 31, 1999.
S-5
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table represents our ratio of earnings to fixed charges for
the periods shown:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- -----------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C>
6.80x 1.78x 10.56x 10.51x 8.42x
</TABLE>
Earnings consist of income from continuing operations before income taxes
plus fixed charges, net of capitalized interest. Fixed charges consist of
interest expense before reduction for capitalized interest and one-third of
rental expense, which is considered to be representative of an interest factor.
S-6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following tables set forth our selected consolidated financial
information for the five years ended December 31, 1999. For additional financial
information, you should refer to our financial statements in our Annual Report
to Shareholders on Form 10-K, filed on March 30, 2000 with the SEC, which is
incorporated by reference into this prospectus supplement. See "Where You Can
Find More Information" in the accompanying prospectus.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1999 1998 1997 1996 1995
(IN MILLIONS, EXCEPT PER SHARE AND RATIO AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA:
Revenues from continuing operations:
Premiums earned....................... $ 5,290 $ 5,553 $ 5,996 $ 5,843 $ 5,399
Net investment income................. 1,557 1,571 1,573 1,509 1,471
Asset management...................... 340 302 262 220 221
Realized investment gains............. 277 201 423 262 91
Other................................. 105 81 54 59 91
------- ------- ------- ------- -------
Total revenues...................... 7,569 7,708 8,308 7,893 7,273
------- ------- ------- ------- -------
Interest expense........................ 99 75 86 87 91
Income from continuing operations before
income taxes and cumulative effect of
accounting change (1)................. 1,017 120 1,433 1,323 1,020
Net income (1).......................... 834 89 929 733 751
Cash dividends declared per share....... 1.04 1.00 0.94 0.88 0.80
CONSOLIDATED BALANCE SHEET DATA:
Total assets............................ $38,873 $37,864 $36,887 $34,667 $32,798
Debt.................................... 1,466 1,260 1,304 1,171 1,304
Capital securities...................... 425 503 503 307 207
Common shareholders' equity............. 6,448 6,621 6,591 5,631 5,342
Common shares outstanding............... 225 234 233 231 235
PROPERTY-LIABILITY INSURANCE:
Written premiums........................ $ 5,112 $ 5,276 $ 5,682 $ 5,683 $ 5,561
Statutory combined ratio:
Loss and loss expense ratio......... 72.9% 82.2% 69.8% 68.9% 71.5%
Underwriting expense ratio.......... 35.0% 35.2% 33.5% 31.9% 30.6%
------- ------- ------- ------- -------
Combined ratio.................. 107.9% 117.4% 103.3% 100.8% 102.1%
======= ======= ======= ======= =======
LIFE INSURANCE:
Product sales........................... $ 1,000 $ 501 $ 446 $ 427 $ 348
Net income.............................. 44 13 51 (5) 19
NUVEEN:
Assets under management................. $59,784 $55,267 $49,594 $33,191 $33,042
Net income (The St. Paul's share)....... 73 62 56 57 55
</TABLE>
- --------------------------
(1) We recorded a pretax merger-related charge to earnings of $292 million in
1998, primarily for severance and facilities exit costs; we also recorded a
$215 million pretax provision to increase USF&G Corporation's loss and loss
adjustment expense reserves subsequent to the merger. See notes 15 and 8 to
our financial statements in our Annual Report to Shareholders on Form 10-K,
filed on March 30, 2000 with the SEC.
S-7
<PAGE>
DESCRIPTION OF SENIOR NOTES
THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE SENIOR NOTES
OFFERED BY THIS PROSPECTUS SUPPLEMENT SUPPLEMENTS THE DESCRIPTION OF THE GENERAL
TERMS AND PROVISIONS OF THE SENIOR NOTES SET FORTH IN THE ACCOMPANYING
PROSPECTUS (THE SENIOR NOTES ARE REFERRED TO IN THAT PROSPECTUS AS THE "DEBT
SECURITIES"). YOU SHOULD CAREFULLY READ THE ENTIRE PROSPECTUS AND PROSPECTUS
SUPPLEMENT TO UNDERSTAND FULLY THE TERMS OF THE SENIOR NOTES. ALL OF THE
INFORMATION SET FORTH BELOW IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
EXPLANATION SET FORTH IN THE ACCOMPANYING PROSPECTUS.
The Senior Notes are a single series of senior debt securities issued by us
under the indenture, dated as of March 31, 1990, between us and The Chase
Manhattan Bank, as trustee, which is more fully described in the prospectus. The
Senior Notes are unsecured and will rank equally with all of our other senior
and unsubordinated debt. As of December 31, 1999, we had $1,466 million of
senior and unsubordinated debt outstanding. See "Capitalization."
The maximum principal amount of the Senior Notes that we will issue is
$300 million. The Senior Notes will mature on April 15, 2010. We have the option
to redeem the Senior Notes before their stated maturity on the terms described
below. Holders of the Senior Notes do not have any similar option to require us
to redeem the Senior Notes before their stated maturity. The Senior Notes will
not be entitled to the benefit of any sinking fund.
The full defeasance and covenant defeasance provisions of the indenture
described in the prospectus will apply to the Senior Notes.
We will periodically pay interest on the Senior Notes at an annual rate of
% from the date of issue. Interest will be payable semiannually on each
April 15 and October 15, beginning October 15, 2000, to the persons in whose
names the Senior Notes are registered at the close of business on the preceding
April 1 or October 1, respectively, except that any interest payable upon
maturity of the Senior Notes will be payable to the person to whom the principal
of the Senior Note is payable.
OPTIONAL REDEMPTION
At our option, we may redeem all or part of the Senior Notes at any time.
The redemption price will equal the greater of (1) 100% of the principal amount
of the Senior Notes to be redeemed or (2) a "make whole" amount, which will be
calculated as described below. At the time of any redemption, we will also pay
all interest that has accrued to the redemption date on the redeemed Senior
Notes.
CALCULATION OF MAKE WHOLE AMOUNT
The "make whole" amount will equal the sum of the present values of the
Remaining Scheduled Payments (as defined below) discounted to the redemption
date, on a semiannual basis, at a rate equal to the Treasury Rate (as defined
below) plus basis points.
"REMAINING SCHEDULED PAYMENTS" means the remaining scheduled payments of the
principal and interest that would be due after the redemption date of a Senior
Note if such Senior Note were not redeemed. However, if the redemption date is
not a scheduled interest payment date, the amount of the next succeeding
scheduled interest payment on such Senior
S-8
<PAGE>
Note will be reduced by the amount of interest accrued on such Senior Note to
such redemption date.
"TREASURY RATE" means an annual rate equal to the semiannual equivalent
yield to maturity of the Comparable Treasury Issue (as defined below), assuming
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for the redemption
date. The semiannual equivalent yield to maturity will be computed as of the
third business day immediately preceding the redemption date.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by Donaldson, Lufkin & Jenrette Securities Corporation or an affiliate
as having a maturity comparable to the remaining term of the Senior Notes that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Senior Notes.
"COMPARABLE TREASURY PRICE" means the average of three Reference Treasury
Dealer Quotations (as defined below) obtained by the trustee for the redemption
date.
"REFERENCE TREASURY DEALERS" means Donaldson, Lufkin & Jenrette Securities
Corporation (so long as it continues to be a primary U.S. Government securities
dealer) and any two other primary U.S. Government securities dealers we choose.
If Donaldson, Lufkin & Jenrette Securities Corporation ceases to be a primary
U.S. Government securities dealer, we will appoint in its place another
nationally recognized investment banking firm that is a primary U.S. Government
securities dealer.
"REFERENCE TREASURY DEALER QUOTATION" means the average, as determined by
the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by a Reference Treasury Dealer at 3:30 p.m., New York
City time, on the third business day preceding the redemption date.
REDEMPTION PROCEDURES
We will give you at least 30 days (but not more than 60 days) prior notice
of any redemption. If less than all of the Senior Notes are redeemed, the
trustee will select the Senior Notes to be redeemed by a method determined by
the trustee to be fair and appropriate.
On or before the redemption date, we will deposit with a paying agent (or
the trustee) money sufficient to pay the redemption price and accrued interest
on the Senior Notes to be redeemed on such date. On and after the redemption
date, interest will cease to accrue on any Senior Notes that have been called
for redemption (unless we default in the payment of the redemption price and
accrued interest).
If any redemption date is not a business day, then the redemption price and
all accrued and unpaid interest to the date of redemption will be payable on the
next business day (and without any interest or other payment in respect of any
such delay). However, if the business day is in the next calendar year, the
redemption amount will be payable on the preceding business day.
S-9
<PAGE>
BOOK-ENTRY DELIVERY AND FORM
The Senior Notes will be issued as global debt securities in "book-entry"
form in multiples of $1,000. See "Description of Debt Securities We May
Offer--Legal Ownership--Global Securities" in the accompanying prospectus. The
Depository Trust Company ("DTC") will be the depository with respect to the
Senior Notes. The Senior Notes will be issued as fully-registered securities in
the name of Cede & Co., DTC's partnership nominee, and will be deposited with
DTC.
DTC has advised us that it 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
Exchange Act. DTC holds securities that its participants deposit with DTC and
facilitates the settlement among participants of securities transactions in
deposited securities through electronic computerized book-entry changes in
participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Participants include securities brokers and dealers
(including the underwriters), banks, trust companies, clearing corporations and
certain other organizations. DTC is owned by a number of its participants and by
the New York Stock Exchange, Inc., the American Stock Exchange LLC and the
National Association of Securities Dealers, Inc. Access to DTC's book-entry
system is also available to others, such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Senior Notes will be made by the underwriters in
immediately available funds. All payments of principal and interest on the
Senior Notes will be made by us in immediately available funds. The Senior Notes
will trade in DTC's settlement system until maturity, and secondary market
trading activity in the Senior Notes therefore will be required by DTC to settle
in immediately available funds.
S-10
<PAGE>
UNDERWRITING
The underwriters named below have severally agreed, subject to the terms and
conditions of the underwriting agreement with us, to purchase the principal
amount of Senior Notes set forth below opposite their respective names. The
underwriters are committed to purchase all of such Senior Notes if any are
purchased. Under certain circumstances, the commitments of non-defaulting
underwriters may be increased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS: OF SENIOR NOTES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation..... $
Lehman Brothers Inc.....................................
The Williams Capital Group, L.P.........................
------------
Total................................................. $300,000,000
============
</TABLE>
The underwriters propose to offer the Senior 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 Senior Notes. The
underwriters may allow, and such dealers may reallow, a concession not to exceed
% of the principal amount of the Senior Notes to certain brokers and dealers.
After the Senior Notes are released for sale to the public, the offering price
and other selling terms may from time to time be varied by the underwriters.
In connection with the offering of the Senior Notes, the underwriters may
engage in overallotment, stabilizing transactions and short covering
transactions in accordance with Regulation M under the Securities and Exchange
Act of 1934. Overallotment involves sales in excess of the offering size, which
create short positions for the underwriters. Stabilizing transactions involve
bids to purchase the Senior Notes in the open market for the purpose of pegging,
fixing or maintaining the price of the Senior Notes. Short covering transactions
involve purchases of the Senior Notes in the open market after the distribution
has been completed in order to cover short positions. These stabilizing
transactions and short covering transactions may cause the price of the Senior
Notes to be higher than it would otherwise be in the absence of such
transactions. Such activities, if commenced, may be discontinued at any time.
All secondary trading in the Senior Notes will settle in immediately
available funds. See "Description of Senior Notes--Same-Day Settlement and
Payment."
We do not intend to apply for listing of the Senior Notes on a national
securities exchange, but we have been advised by the underwriters that the
underwriters intend to make a market in the Senior Notes. The underwriters are
not obligated, however, to make a market in the Senior Notes 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 Senior Notes.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, the underwriters and
certain of their affiliates may in the future engage in investment banking
transactions with us.
We estimate that we will spend approximately $200,000 for printing, rating
agency, trustee, accounting and legal fees and other expenses relating to the
offering.
S-11
<PAGE>
$450,000,000
THE ST. PAUL COMPANIES, INC.
Debt Securities
-----------
The St. Paul Companies, Inc. may from time to time issue up to $450,000,000
aggregate principal amount of debt securities. The accompanying prospectus
supplement will specify the terms of the securities.
The St. Paul Companies, Inc. may sell these securities to or through
underwriters, and also to other purchasers or through agents. The names of the
underwriters or agents will be set forth in the accompanying prospectus
supplement.
--------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
--------------
Prospectus dated March 30, 2000.
<PAGE>
THE ST. PAUL
The St. Paul Companies, Inc. is a management company principally engaged in
property-liability insurance and reinsurance underwriting. We also have a
presence in the life insurance industry through our ownership of Fidelity and
Guaranty Life Insurance Company and in the asset management industry through our
majority ownership of The John Nuveen Company. As a management company, we
oversee the operations of our subsidiaries and provide them with capital and
management and administrative services. On April 24, 1998, we completed our
merger with USF&G Corporation in a tax-free exchange of stock accounted for as a
pooling of interests. On September 30, 1999 we completed the sale of our
standard personal lines business to Metropolitan Property & Casualty Insurance
Company for approximately $600 million. At March 1, 2000, we and our
subsidiaries employed approximately 12,000 persons. In 1999, insurance and
reinsurance underwriting accounted for approximately 89% of consolidated
revenues from continuing operations, life insurance accounted for approximately
6% of consolidated revenues from continuing operations, and asset management-
investment banking operations accounted for approximately 5% of consolidated
revenues from continuing operations.
Our principal and registered executive offices are located at 385 Washington
Street, St. Paul, Minnesota 55102, and our telephone number is (651) 310-7911.
Our e-mail address is [email protected]. Unless the context otherwise indicates,
the terms "The St. Paul", "we", "us" or "our" means The St. Paul
Companies, Inc. and its consolidated subsidiaries and gives effect to the merger
with USF&G Corporation.
RATIOS OF EARNINGS TO FIXED CHARGES OF THE COMPANY
Our consolidated ratios of earnings to fixed charges for each of the fiscal
years ended December 31, 1995 through 1999 are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
- -----------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
6.80 1.78 10.56 10.51 8.42
</TABLE>
Earnings consist of income from continuing operations before income taxes
plus fixed charges, net of capitalized interest. Fixed charges consist of
interest expense before reduction for capitalized interest and one-third of
rental expense, which is considered to be representative of an interest factor.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, the net
proceeds from the sale of the debt securities will be used for general corporate
purposes, which may include, among other things, working capital, capital
expenditures, the repurchase of shares of common stock, the repayment of
short-term borrowings or acquisitions.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a shelf registration process. Under this shelf process, we may
sell any combination of the debt securities described in this prospectus in one
or more offerings up to a total dollar amount of $450,000,000. This prospectus
provides you with a general description of the debt securities we may offer.
Each time we sell debt securities, we will provide a prospectus supplement that
will contain specific information about the terms of that offering. The
prospectus supplement may also add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"WHERE YOU CAN FIND MORE INFORMATION".
2
<PAGE>
DESCRIPTION OF DEBT SECURITIES
WE MAY OFFER
As required by Federal law for all bonds and notes of companies that are
publicly offered, the debt securities are governed by a document called the
indenture. The indenture is a contract, dated as of March 31, 1990, between us
and The Chase Manhattan Bank, which acts as trustee. The trustee has two main
roles:
- - First, the trustee can enforce your rights against us if we default. There are
some limitations on the extent to which the trustee acts on your behalf,
described later on page 11 under "Remedies if an Event of Default Occurs"; and
- - Second, the trustee performs administrative duties for us, such as sending you
interest payments, transferring your debt securities to a new buyer if you
sell and sending you notices.
The indenture and its associated documents contain the full legal text of
the matters described in this section. The indenture and the debt securities are
governed by New York law. The indenture is an exhibit to our registration
statement. See "Where You Can Find More Information" on page 13 for information
on how to obtain a copy.
We may issue as many distinct series of debt securities under the indenture
as we wish. This section summarizes all the material terms of the debt
securities that are common to all series, unless otherwise indicated in the
prospectus supplement relating to a particular series.
Because this section is a summary, it does not describe every aspect of the
debt securities, and is subject to and qualified in its entirety by reference to
all the provisions of the indenture, including definitions of some of the terms
used in the indenture. We describe the meaning for only the more important
terms. We also include references in parentheses to some sections of the
indenture. Whenever we refer to particular sections or defined terms of the
indenture in this prospectus or in the prospectus supplement, those sections or
defined terms are incorporated by reference here or in the prospectus
supplement.
We may issue the debt securities as original issue discount securities,
which are securities that are offered and sold at a substantial discount to
their stated principal amount. (SECTION 101) The prospectus supplement relating
to original issue discount securities will describe federal income tax
consequences and other special considerations applicable to them. The debt
securities may also be issued as indexed securities or securities denominated in
foreign currencies or currency units, as described in more detail in the
prospectus supplement relating to any such securities. The prospectus supplement
relating to such debt securities will also describe any special considerations
and any material additional tax considerations applicable to such debt
securities.
In addition, the specific financial, legal and other terms particular to a
series of debt securities are described in the prospectus supplement and the
pricing supplement relating to the series. The prospectus supplement relating to
a series of debt securities will describe the following terms of the series:
- - the title of the series of debt securities;
- - any limit on the aggregate principal amount of the series of debt securities;
- - the date or dates on which the series of debt securities will mature;
- - the rate or rates, which may be fixed or variable, per annum at which the
series of debt securities will bear interest, if any, and the date or dates
from which that interest, if any, will accrue;
- - the dates on which interest, if any, on the series of debt securities will be
payable and the regular record dates for the interest payment dates;
- - any mandatory or optional sinking funds or analogous provisions or provisions
for redemption at the option of the holder;
- - the date, if any, after which and the price or prices at which the series of
debt securities
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may, in accordance with any optional or mandatory redemption provisions, be
redeemed and the other detailed terms and provisions of those optional or
mandatory redemption provisions, if any;
- - if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the series of debt securities will be issuable;
- - if other than the principal amount thereof, the portion of the principal
amount of the series of debt securities which will be payable upon the
declaration of acceleration of the maturity of such series of debt securities;
- - the currency of payment of principal, premium, if any, and interest on the
series of debt securities;
- - any index used to determine the amount of payment of principal of, premium, if
any, and interest on the series of debt securities;
- - the applicability of the provisions described under "Defeasance";
- - if the series of debt securities will be issuable only in the form of a global
security as described under "Book-Entry Debt Securities", the depository or
its nominee with respect to the series of debt securities and the
circumstances under which the global security may be registered for transfer
or exchange in the name of a person other than the depository or its nominee;
and
- - any other special feature of the series of debt securities.
Those terms may vary from the terms described here. Accordingly, this
summary also is subject to and qualified by reference to the description of the
terms of the series described in the prospectus supplement. The prospectus
supplement relating to each series of debt securities will be attached to the
front of this prospectus.
LEGAL OWNERSHIP
STREET NAME AND OTHER INDIRECT HOLDERS
Investors who hold debt securities in accounts at banks or brokers will
generally not be recognized by us as legal holders of debt securities. This is
called holding in "street name". Instead, we would recognize only the bank or
broker, or the financial institution the bank or broker uses to hold its debt
securities. These intermediary banks, brokers and other financial institutions
pass along principal, interest and other payments on the debt securities, either
because they agree to do so in their customer agreements or because they are
legally required to. If you hold debt securities in street name, you should
check with your own institution to find out:
- - How it handles securities payments and notices.
- - Whether it imposes fees or charges.
- - How it would handle voting if ever required.
- - Whether and how you can instruct it to send you debt securities registered in
your own name so you can be a direct holder as described below.
- - How it would pursue rights under the debt securities if there were a default
or other event triggering the need for holders to act to protect their
interests.
DIRECT HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, run only to persons or entities who
are the direct holders of debt securities, i.e., those who are registered as
holders of debt securities. As noted above, we do not have obligations to you if
you hold in street name or through other indirect means, either because you
choose to hold debt securities in that manner or because the debt securities are
issued in the form of global securities as described below. For example, once we
make payment to the registered holder, we have no further responsibility for the
payment even if that registered holder is legally required
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to pass the payment along to you as a street name customer but does not do so.
GLOBAL SECURITIES
WHAT IS A GLOBAL SECURITY? A global security is a special type of
indirectly held security, as described above under "Street Name and Other
Indirect Holders".
If we choose to issue debt securities in the form of global securities, the
ultimate beneficial owners can only be indirect holders. We do this by requiring
that the global security be registered in the name of a financial institution we
select and by requiring that the debt securities included in the global security
not be transferred to the name of any other direct holder unless the special
circumstances described below occur. The financial institution that acts as the
sole direct holder of the global security is called the depositary.
Any person wishing to own a debt security included in the global security
must do so indirectly by virtue of an account with a broker, bank or other
financial institution that in turn has an account with the depositary. The
prospectus supplement indicates whether your series of debt securities will be
issued only in the form of global securities.
SPECIAL INVESTOR CONSIDERATIONS FOR GLOBAL SECURITIES. As an indirect
holder, an investor's rights relating to a global security will be governed by
the account rules of the investor's financial institution and of the depositary,
as well as general laws relating to securities transfers. We do not recognize
this type of investor as a registered holder of debt securities and instead deal
only with the depositary that holds the global security.
If you are an investor in debt securities that are issued only in the form
of global securities, you should be aware that:
- - You cannot get debt securities registered in your own name.
- - You cannot receive physical certificates for your interest in the debt
securities.
- - You will be a street name holder and must look to your own bank or broker for
payments on the debt securities and protection of your legal rights relating
to the debt securities. See "Street Name and Other Indirect Holders" on
page 4 and this page.
- - You may not be able to sell interests in the debt securities to some insurance
companies and other institutions that are required by law to own their
securities in the form of physical certificates.
- - The depositary's policies will govern payments, transfers, exchange and other
matters relating to your interest in the global security. We and the trustee
have no responsibility for any aspect of the depositary's actions or for its
records of ownership interests in the global security. We and the trustee also
do not supervise the depositary in any way.
- - The depositary will require that interests in a global security be purchased
or sold within its system using same-day funds for settlement.
SPECIAL SITUATIONS WHEN GLOBAL SECURITY WILL BE TERMINATED. In a few
special situations described later, the global security will terminate and
interests in it will be exchanged for physical certificates representing debt
securities. After that exchange, the choice of whether to hold debt securities
directly or in street name will be up to you. You must consult your own bank or
broker to find out how to have your interests in debt securities transferred to
your own name, so that you will be a direct holder. The rights of street name
investors and direct holders in the debt securities have been previously
described in the subsections entitled, "Street Name and Other Indirect Holders"
and "Direct Holders" on page 4.
The special situations for termination of a global security are:
- - When the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary,
- - When we notify the trustee that we wish to terminate the global security, or
- - When an event of default on the debt securities has occurred and has not been
cured.
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Defaults are discussed later under "Default and Related Matters" on pages 10
to 12.
The prospectus supplement may also list additional situations for terminating a
global security that would apply only to the particular series of debt
securities covered by the prospectus supplement. When a global security
terminates, the depositary, and not we or the trustee, is responsible for
deciding the names of the institutions that will be the initial direct holders.
(SECTIONS 204 AND 305)
IN THE REMAINDER OF THIS DESCRIPTION "YOU" MEANS DIRECT HOLDERS AND NOT STREET
NAME OR OTHER INDIRECT HOLDERS OF DEBT SECURITIES. INDIRECT HOLDERS SHOULD READ
THE PREVIOUS SUBSECTION ON PAGE 4 ENTITLED "STREET NAME AND OTHER INDIRECT
HOLDERS".
OVERVIEW OF REMAINDER OF THIS DESCRIPTION
The remainder of this description summarizes:
- - ADDITIONAL MECHANICS relevant to the debt securities under normal
circumstances, such as how you transfer ownership and where we make payments.
- - Your rights under several SPECIAL SITUATIONS, such as if we merge with another
company or if we want to change a term of the debt securities.
- - A covenant contained in the indenture that restricts our ability to incur
liens and other encumbrances on the voting stock of some of our subsidiaries.
A particular series of debt securities may have additional restrictive
covenants.
- - Your rights if we DEFAULT or experience other financial difficulties.
- - OUR RELATIONSHIP WITH THE TRUSTEE.
ADDITIONAL MECHANICS
FORM, EXCHANGE AND TRANSFER
The debt securities will be issued:
- - only in fully registered form
- - without interest coupons
- - unless otherwise indicated in the prospectus supplement, in denominations that
are even multiples of $1,000. (SECTION 302)
You may have your debt securities broken into more debt securities of
smaller denominations or combined into fewer debt securities of larger
denominations, as long as the total principal amount is not changed.
(SECTION 305) This is called an exchange.
You may exchange or transfer debt securities at the office of the trustee.
The trustee acts as our agent for registering debt securities in the names of
holders and transferring debt securities. We may change this appointment to
another entity or perform the service ourselves. The entity performing the role
of maintaining the list of registered direct holders is called the security
registrar. It will also register transfers of the debt securities.
(SECTION 305)
You will not be required to pay a service charge to transfer or exchange
debt securities, but you may be required to pay for any tax or other
governmental charge associated with the exchange or transfer. The transfer or
exchange will only be made if the security registrar is satisfied with your
proof of ownership. (SECTION 305)
If we have designated additional transfer agents, they are named in the
prospectus supplement. We may cancel the designation of any particular transfer
agent. We may also approve a change in the office through which any transfer
agent acts. (SECTION 1002)
If the debt securities are redeemable and we redeem less than all of the
debt securities of a particular series, we may block the transfer or exchange of
debt securities during the period beginning 15 days before the day we mail the
notice of redemption and ending on the day of that mailing, in order to freeze
the list of holders to prepare the mailing. We may also refuse to register
transfers or exchanges of debt securities selected for redemption, except that
we will continue to permit transfers and exchanges of the unredeemed portion of
any debt security being partially redeemed. (SECTION 305)
PAYMENT AND PAYING AGENTS
We will pay interest to you if you are a direct holder listed in the
trustee's records at the close of business on a particular day in
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advance of each due date for interest, even if you no longer own the debt
security on the interest due date. That particular day, usually about two weeks
in advance of the interest due date, is called the regular record date and is
stated in the prospectus supplement. (SECTION 307) Holders buying and selling
debt securities must work out between them how to compensate for the fact that
we will pay all the interest for an interest period to the one who is the
registered holder on the regular record date. The most common manner is to
adjust the sales price of the debt securities to pro rate interest fairly
between buyer and seller. This pro rated interest amount is called accrued
interest.
We will pay interest, principal and any other money due on the debt
securities at the corporate trust office of the trustee in New York City.
(SECTION 1002) That office is currently located at 450 West 33rd Street, 15th
Floor, New York, New York 10001. You must make arrangements to have your
payments picked up at or wired from that office. We may also choose to pay
interest by mailing checks.
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR
INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS.
We may also arrange for additional payment offices, and may cancel or change
these offices, including our use of the trustee's corporate trust office. These
offices are called paying agents. We may also choose to act as our own paying
agent. We must notify you of changes in the paying agents for any particular
series of debt securities. (SECTION 1002)
NOTICES
We and the trustee will send notices regarding the debt securities only to
direct holders, using their addresses as listed in the trustee's records.
(SECTIONS 101 AND 106)
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of one year after the amount is due to
direct holders will be repaid to us. After that one-year period, you may look
only to us for payment and not to the trustee, any other paying agent or anyone
else. (SECTION 1003)
SPECIAL SITUATIONS
MERGERS AND SIMILAR EVENTS
We are generally permitted to consolidate or merge with another company or
firm. We are also permitted to sell or lease substantially all of our assets to
another firm, or to buy or lease substantially all of the assets of another
firm. However, we may not take any of these actions unless the following
conditions (among others) are met:
- - Where we merge out of existence or sell or lease substantially all our assets,
the other firm may not be organized under a foreign country's laws, that is,
it must be a corporation, partnership or trust organized under the laws of a
State or the District of Columbia or under federal law, and it must agree to
be legally responsible for the debt securities.
- - The merger, sale of assets or other transaction must not cause a default on
the debt securities, and we must not already be in default, unless the merger
or other transaction would cure the default. For purposes of this no-default
test, a default would include an event of default, as described beginning on
page 10 that has occurred and not been cured. A default for this purpose would
also include any event that would be an event of default if the requirements
for giving us notice of our default or our default having to exist for a
specific period of time were disregarded. (SECTION 801)
- - It is possible that the merger, sale of assets or other transaction would
cause some of our property to become subject to a mortgage or other legal
mechanism giving lenders preferential rights in that property over other
lenders or over our general creditors if we fail to pay them back. We have
promised to limit these preferential rights on voting stock of any designated
subsidiaries, called liens, as discussed on page 9 under "Restrictive
Covenants--Limitation on Liens and Other Encumbrances on Voting Stock of
Designated Subsidiaries". If a merger or other transaction would create any
liens on any such voting stock, we must comply with
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that restrictive covenant. We would do this either by deciding that the liens
were permitted, or by following the requirements of the restrictive covenant
to grant an equivalent or higher-ranking lien on the same voting stock to you
and the other direct holders of the debt securities.
MODIFICATION AND WAIVER
There are four types of changes we can make to the indenture and the debt
securities.
CHANGES REQUIRING YOUR APPROVAL. First, there are changes that cannot be
made to your debt securities without your specific approval. Following is a list
of those types of changes:
- - change the payment due date of the principal or interest on a debt security
stated in the debt security
- - reduce any amounts due on a debt security
- - reduce the amount of principal payable upon acceleration of the maturity of a
debt security following a default
- - change the place or currency of payment on a debt security
- - impair your right to sue for payment
- - reduce the percentage of direct holders of debt securities whose consent is
needed to modify or amend the indenture
- - reduce the percentage of direct holders of debt securities whose consent is
needed to waive compliance with certain provisions of the indenture or to
waive certain defaults
- - modify any other aspect of the provisions dealing with modification and waiver
of the indenture (SECTION 902)
CHANGES REQUIRING A 66 2/3 VOTE. The second type of change to the indenture
and the debt securities is the kind that requires a vote in favor by direct
holders of debt securities owning 66 2/3% of the principal amount of the
particular series affected. (SECTION 902) Most changes fall into this category,
except for changes noted above as requiring your specific approval, and, as
noted below, waivers requiring only a majority vote or changes not requiring
approval.
CHANGES NOT REQUIRING APPROVAL. The third type of change does not require
any vote by holders of debt securities. This type is limited to clarifications
and certain other changes that would not adversely affect holders of the debt
securities. (SECTION 901)
CHANGES BY WAIVER REQUIRING A MAJORITY VOTE. Fourth, we need a vote by
direct holders of debt securities owning a majority of the principal amount of
the particular series affected to obtain a waiver of certain of the restrictive
covenants, including the one described later under "Restrictive Covenants--
Limitation on Liens and Other Encumbrances on Voting Stock of Designated
Subsidiaries". (SECTION 1009) We also need such a majority vote to obtain a
waiver of any past default, except a payment default listed in the first
category described later under "Default and Related Matters--Events of Default".
(SECTION 513)
FURTHER DETAILS CONCERNING VOTING. When taking a vote, we will use the
following rules to decide how much principal amount to attribute to a debt
security:
- - For original issue discount securities, we will use the principal amount that
would be due and payable on the voting date if the maturity of the debt
securities were accelerated to that date because of a default.
- - For debt securities whose principal amount is not known, for example, because
it is based on an index, we will use a special rule for that debt security
described in the prospectus supplement.
- - For debt securities denominated in one or more foreign currencies or currency
units, we will use the U.S. dollar equivalent.
Debt securities will not be considered outstanding, and therefore will not
be eligible to vote, if we have deposited or set aside in trust for you money
for their payment or redemption. (SECTION 107) Debt securities will also not be
eligible to vote if they have been fully defeased as described later on this and
next pages under "Full Defeasance". (SECTION 101)
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We will generally be entitled to set any day as a record date for the
purpose of determining the direct holders of outstanding debt securities that
are entitled to vote or take other action under the indenture. (SECTION 301) In
some circumstances, the trustee will be entitled to set a record date for action
by direct holders.
STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS FOR
INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE SEEK TO CHANGE THE
INDENTURE OR THE DEBT SECURITIES OR REQUEST A WAIVER.
RESTRICTIVE COVENANTS
LIMITATION ON LIENS AND OTHER ENCUMBRANCES ON VOTING STOCK OF DESIGNATED
SUBSIDIARIES
Some of our property may be subject to a mortgage or other legal mechanism
that gives our lenders preferential rights in that property over other lenders,
including you and the other direct holders of the debt securities, or over our
general creditors if we fail to pay them back. These preferential rights are
called liens. In the indenture, we promise not to create, issue, assume, incur
or guarantee any indebtedness for borrowed money that is secured by a mortgage,
pledge, lien, security interest or other encumbrance on any voting stock of a
designated subsidiary, unless we also secure all the debt securities that are
deemed outstanding under the indenture equally with, or prior to, the
indebtedness being secured, together with, at our election, any of our or any
designated subsidiary's other indebtedness. (SECTION 1007) This promise does not
restrict our ability to sell or otherwise dispose of our interests in any
designated subsidiary.
As used here:
- - voting stock means all classes of stock (including any interest in such stock)
outstanding of a designated subsidiary that are normally entitled to vote in
elections of directors.
- - designated subsidiary means St. Paul Fire and Marine Insurance Company and any
of our other subsidiaries that has assets exceeding 20% of our consolidated
assets. As of the date of this prospectus, St. Paul Fire and Marine Insurance
Company and United States Fidelity and Guaranty Company are the only
subsidiaries satisfying this 20% test.
- - For purposes of applying the 20% test, the assets of a subsidiary and our
consolidated assets are both determined as of the last day of the most recent
calendar quarter ended at least 30 days prior to the date of the 20% test and
in accordance with generally accepted accounting principles as in effect on
the last day of such calendar quarter. (SECTION 1007)
DEFEASANCE
The following discussion of full defeasance and covenant defeasance will be
applicable to your series of debt securities only if we choose to have them
apply to that series. If we do so choose, we will state that in the prospectus
supplement. (SECTION 1301)
FULL DEFEASANCE. If there is a change in federal tax law, as described
below, we can legally release ourselves from any payment or other obligations on
the debt securities, called full defeasance, if we put in place the following
arrangements for you to be repaid:
- - We must deposit in trust for your benefit and the benefit of all other direct
holders of the debt securities a combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on their
various due dates.
- - There must be a change in current federal tax law or an IRS ruling that lets
us make the above deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit and just repaid
the debt securities ourselves. (Under current federal tax law, the deposit and
our legal release from the debt securities would be treated as though we took
back your
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debt securities and gave you your share of the cash and notes or bonds
deposited in trust. In that event, you could recognize gain or loss on the
debt securities you give back to us.)
- - We must deliver to the trustee a legal opinion of our counsel confirming the
tax law change described above.
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the debt securities.
You could not look to us for repayment in the unlikely event of any shortfall.
Conversely, the trust deposit would most likely be protected from claims of our
lenders and other creditors if we ever become bankrupt or insolvent. (SECTIONS
1302 AND 1304)
COVENANT DEFEASANCE. Under current federal tax law, we can make the same
type of deposit described above and be released from some of the restrictive
covenants in the debt securities. This is called covenant defeasance. In that
event, you would lose the protection of those restrictive covenants but would
gain the protection of having money and securities set aside in trust to repay
the debt securities. In order to achieve covenant defeasance, we must do the
following:
- - We must deposit in trust for your benefit and the benefit of all other direct
holders of the debt securities a combination of money and U.S. government or
U.S. government agency notes or bonds that will generate enough cash to make
interest, principal and any other payments on the debt securities on their
various due dates.
- - We must deliver to the trustee a legal opinion of our counsel confirming that
under current federal income tax law we may make the above deposit without
causing you to be taxed on the debt securities any differently than if we did
not make the deposit and just repaid the debt securities ourselves.
If we accomplish covenant defeasance, the following provisions, among
others, of the indenture and the debt securities would no longer apply:
- - Our promises regarding conduct of our business previously described on page 9
under "Restrictive Covenants--Limitation on Liens and Other Encumbrances on
Voting Stock of Designated Subsidiaries", and any other covenants applicable
to the series of debt securities and described in the prospectus supplement.
- - The condition regarding the treatment of liens when we merge or engage in
similar transactions, as described on page 7 under "Mergers and Similar
Events".
- - The events of default relating to breach of covenants and acceleration of the
maturity of other debt, described on page 11 under "What Is an Event of
Default?"
If we accomplish covenant defeasance, you can still look to us for repayment
of the debt securities if there were a shortfall in the trust deposit. In fact,
if one of the remaining events of default occurred, such as our bankruptcy, and
the debt securities become immediately due and payable, there may be a shortfall
in the trust deposit. Depending on the event causing the default, you may not be
able to obtain payment of the shortfall. (SECTIONS 1303 AND 1304)
DEFAULT AND RELATED MATTERS
EQUAL RANKING WITH OUR OTHER UNSECURED CREDITORS
The debt securities are not secured by any of our property or assets.
Accordingly, your ownership of debt securities means you are one of our
unsecured creditors. The debt securities are not subordinated to any of our
other debt obligations and therefore they rank equally with all our other
unsecured and unsubordinated indebtedness.
EVENTS OF DEFAULT
You will have special rights if an event of default occurs and is not cured,
as described later in this subsection.
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WHAT IS AN EVENT OF DEFAULT? The term event of default means any of the
following:
- - We do not pay the principal or any premium on a debt security on its due date.
- - We do not pay interest on a debt security within 30 days of its due date.
- - We do not deposit money into a separate custodial account, known as sinking
fund, when such deposit is due, if we agree to maintain any such sinking fund.
- - We remain in breach of the restrictive covenant described previously under
"Restrictive Covenants--Limitation on Liens and Other Encumbrances on Voting
Stock of Designated Subsidiaries" or any other term of the indenture for
60 days after we receive a notice of default stating we are in breach. The
notice must be sent by either the trustee or direct holders of at least 25% of
the principal amount of debt securities of the affected series.
- - Other debt of ours totalling $10,000,000 or more defaults, our obligation to
repay it is accelerated by our lenders, and this repayment obligation remains
accelerated for 10 days after we receive a notice of default. The notice must
be sent by the trustee or direct holders of at least 10% of the principal
amount of the debt securities of the affected series.
- - We file for bankruptcy or certain other events of bankruptcy, insolvency or
reorganization occur.
- - Any other event of default described in the prospectus supplement occurs.
(SECTION 501)
REMEDIES IF AN EVENT OF DEFAULT OCCURS. If an event of default has occurred
and has not been cured, the trustee or the direct holders of 25% in principal
amount of the debt securities of the affected series may declare the entire
principal amount of all the debt securities of that series to be due and
immediately payable. This is called a declaration of acceleration of maturity. A
declaration of acceleration of maturity may be canceled by the direct holders of
at least a majority in principal amount of the debt securities of the affected
series. (SECTION 502)
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indenture at the request of
any holders unless the direct holders offer the trustee reasonable protection
from expenses and liability, called an indemnity. (SECTION 603) If reasonable
indemnity is provided, the direct holders of a majority in principal amount of
the outstanding debt securities of the relevant series may direct the time,
method and place of conducting any lawsuit or other formal legal action seeking
any remedy available to the trustee. These majority direct holders may also
direct the trustee in performing any other action under the indenture.
(SECTION 512)
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
- - You must give the trustee written notice that an event of default has occurred
and remains uncured.
- - The direct holders of 25% in principal amount of all outstanding debt
securities of the relevant series must make a written request that the trustee
take action because of the default, and must offer reasonable indemnity to the
trustee against the cost and other liabilities of taking that action.
- - The trustee must have not received from direct holders of a majority in
principal amount of the outstanding debt securities of that series a direction
inconsistent with the written notice.
- - The trustee must have not taken action for 60 days after receipt of the above
notice and offer of indemnity. (SECTION 507)
However, you are entitled at any time to bring a law suit for the payment of
money due on your debt security on or after its due date. (SECTION 508)
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STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO OR MAKE A REQUEST OF THE
TRUSTEE AND TO MAKE OR CANCEL A DECLARATION OF ACCELERATION.
We will furnish to the trustee every year a written statement of certain of
our officers certifying that to their knowledge we are in compliance with the
indenture and the debt securities, or else specifying any default.
(SECTION 1008)
OUR RELATIONSHIP WITH THE TRUSTEE
The Chase Manhattan Bank, the trustee under the indenture, has a
$36.5 million participation under a revolving credit agreement among us and
certain banks named in it providing for aggregate borrowing by the Company of a
maximum of $400 million, none of which was outstanding at September 30, 1999. In
addition, The Chase Manhattan Bank has a $50 million participation under a
revolving credit agreement among The John Nuveen Company, one of our
subsidiaries, and certain banks named in it providing for aggregate borrowing by
The John Nuveen Company of a maximum of $200 million, none of which was
outstanding at September 30, 1999.
PLAN OF DISTRIBUTION
The St. Paul may sell debt securities to or through underwriters and also
may sell debt securities directly to other purchasers through agents.
The distribution of the debt securities offered under the prospectus may
occur 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 St. Paul 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 may
act as agents. Underwriters, dealers and agents that participate in the
distribution of debt securities offered under the prospectus may be underwriters
as defined in the Securities Act. Any underwriters or agents will be identified
and their compensation (including underwriting discount) will be described in
the applicable prospectus supplement. The prospectus supplement will also
describe the other terms of the offering, including any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
the offered securities may be listed.
The St. Paul may have agreements with the underwriters, dealers and agents
to indemnify them against certain civil liabilities, including liabilities under
the Securities Act, or to contribute with respect to payments which the
underwriters, dealers or agents may be required to make as a result of those
certain civil liabilities.
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The St. Paul may also sell debt securities directly to one or more
purchasers without using underwriters or agents.
Underwriters, dealers and agents may engage in transactions with or perform
services for The St. Paul or its subsidiaries in the ordinary course of their
businesses.
VALIDITY OF DEBT SECURITIES
The validity of the debt securities will be passed upon for The St. Paul by
Bruce A. Backberg, Senior Vice President of the Company, and for the
underwriters or agents, as the case may be, by Sullivan & Cromwell, New York,
New York. Mr. Backberg may rely as to matters of New York law upon the opinion
of Sullivan & Cromwell, and Sullivan & Cromwell may rely as to matters of
Minnesota law upon the opinion of Mr. Backberg. As of March 27, 2000,
Mr. Backberg owned, directly and indirectly, 22,910 shares of The St. Paul's
common stock, 362 shares of The St. Paul's Series B Convertible Preferred Stock
and exercisable options to purchase 68,298 additional shares of The St. Paul's
common stock. Sullivan & Cromwell have from time to time rendered certain legal
services to The St. Paul.
EXPERTS
The consolidated financial statements and financial statement schedules I
through V of the Company as of December 31, 1998 and 1997, and for each of the
years in the three year period ended December 31, 1998 which are included in or
incorporated by reference in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, and which have been incorporated herein by
reference in this registration statement have been audited by KPMG LLP,
independent auditors, as set forth in their reports thereon incorporated by
reference herein which, as to the years 1997 and 1996, are based in part on the
reports of Ernst & Young LLP, independent auditors. The financial statements and
financial statement schedules referred to above are included in reliance upon
such reports given upon the authority of such firms as experts in accounting and
auditing.
The consolidated financial statements and financial statement schedules as
of December 31, 1997 and for each of the years in the two-year period then ended
have been restated to reflect the pooling of interests with USF&G Corporation.
The reports of KPMG LLP state that KPMG LLP did not audit the consolidated
financial statements or financial statement schedules of USF&G Corporation as of
December 31, 1997 or for either of the years in the two-year period ended
December 31, 1997, which statements reflect total assets constituting 43 percent
as of December 31, 1997 and total revenues constituting 35 percent and 38
percent for the years ended December 31, 1997 and 1996, respectively of the
related consolidated totals. Those statements and financial statement schedules
were audited by Ernst & Young LLP whose reports have been furnished to
KPMG LLP, and the opinions of KPMG LLP, insofar as they relate to the amounts
included for USF&G Corporation, are based solely on the reports of Ernst & Young
LLP.
To the extent that KPMG LLP audits and reports on the consolidated financial
statements of the Company issued at future dates, and consents to the use of
their reports thereon, such consolidated financial statements also will be
incorporated by reference in this registration statement in reliance upon their
reports and said authority.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms.
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The SEC allows us to incorporate by reference the information we file with
them, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference
is an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the following documents of The St. Paul:
- Proxy Statement for the Annual Meeting of Shareholders to be held May 2,
2000, filed with the SEC on March 24, 2000
- Current Report on Form 8-K, filed with the SEC on January 6, 1999
- Current Report on Form 8-K, filed with the SEC on February 3, 1999
- Current Report on Form 8-K, filed with the SEC on March 4, 1999
- Current Report on Form 8-K, filed with the SEC on May 3, 1999
- Current Report on Form 8-K, filed with the SEC on July 13, 1999
- Current Report on Form 8-K, filed with the SEC on October 12, 1999
- Current Report on Form 8-K, filed with the SEC on February 4, 2000
- Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1999, filed with the SEC on May 17, 1999
- Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1999, filed with the SEC on August 12, 1999
- Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1999, filed with the SEC on November 15, 1999
- Annual Report on Form 10-K for the year ended December 31, 1998, filed
with the SEC on March 31, 1999
and any future filings made with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 until we sell all of the
securities.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
The St. Paul Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
(651) 310-7911
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these debt securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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April , 2000
[LOGO]
THE ST. PAUL COMPANIES, INC.
$300,000,000
% SENIOR NOTES DUE 2010
---------------------------------------------
P R O S P E C T U S S U P P L E M E N T
---------------------------------------------
DONALDSON, LUFKIN & JENRETTE
LEHMAN BROTHERS
THE WILLIAMS CAPITAL GROUP, L.P.
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WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED
PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO MATTERS NOT STATED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS SUPPLEMENT IS NOT AN OFFER TO SELL THE SECURITIES
OR OUR SOLICITATION OF YOUR OFFER TO BUY THE SECURITIES IN ANY JURISDICTION
WHERE THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS NOR ANY SALES MADE HEREUNDER
AFTER THE DATE OF THIS PROSPECTUS SUPPLEMENT SHALL CREATE AN IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF THE COMPANY HAVE NOT CHANGED
SINCE THE DATE HEREOF.
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