<PAGE> 1
Total Number of Pages including Exhibits 17
--
Exhibit Index is on Page 3
--
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
June 27, 1995
(Date of earliest event reported)
AVCO FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 0-6119 13-2530491
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
</TABLE>
600 Anton Boulevard, Costa Mesa, CA 92628-5011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(714) 445-7860
1
<PAGE> 2
Item 7. Financial Statements and Exhibits
- -----------------------------------------
(b) Exhibits.
The following exhibit relates to the Registrant's Registration Statement
No. 33-55953 on Form S-3 with respect to which the Registrant commenced an
offering from time to time of $700,000,000 of Medium Terms Notes, Series G due
from more than 9 months to 10 years from date of issue.
4(h)(1) -- Form of Medium Term Notes, Series G.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVCO FINANCIAL SERVICES, INC.
By HERBERT F. SMITH
--------------------------
Herbert F. Smith
Senior Vice President
Dated: June 27, 1995
2
<PAGE> 3
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Page
- ------- ------------
<S> <C> <C>
4(h)(1) --Form of Medium Term Notes, Series G 4 - 17
</TABLE>
3
<PAGE> 1
EXHIBIT 4(h)(1)
REGISTERED REGISTERED
No. G - 1
CUSIP
IF INDICATED ON THE FACE HEREOF THAT THIS NOTE IS A
GLOBAL SECURITY, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, IT MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY, UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
AVCO FINANCIAL SERVICES, INC.
MEDIUM-TERM NOTE, SERIES G
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE
DESIGNATED METHOD) BELOW WILL BE COMPLETED SOLELY FOR THE
PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES.
<TABLE>
<S> <C> <C>
FLOATING RATE NOTE [ ] _____% FIXED RATE NOTE [ ] INDEXED NOTE [ ] (SEE OTHER PROVISIONS BELOW)
GLOBAL SECURITY: [ ] YES [ ] NO PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE: MATURITY DATE:
INTEREST ACCRUAL DATE: INTEREST PAYMENT DATES:
ISSUE PRICE:
REDEMPTION DATE(S) REDEMPTION PRICE(S)
REPAYMENT DATE(S) REPAYMENT PRICE(S) TOTAL AMOUNT OF OID:
YIELD TO MATURITY:
INITIAL ACCRUAL
PERIOD OID:
MINIMUM DENOMINATION (IF OTHER THAN $1,000):
(ONLY APPLICABLE IF THIS IS A FLOATING RATE NOTE):
INITIAL INTEREST RATE: SPREAD (PLUS OR MINUS):
INDEX MATURITY: SPREAD MULTIPLIER:
BASE RATE: MAXIMUM INTEREST RATE:
INTEREST RESET PERIOD: MINIMUM INTEREST RATE:
INTEREST RESET DATES:
OTHER PROVISIONS:
</TABLE>
<PAGE> 2
AVCO FINANCIAL SERVICES, INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns, the principal sum of DOLLARS
on the "Maturity Date," as set forth above, and to pay interest thereon as
described below.
The principal of (and premium, if any) and interest on this
Note are payable by the Company in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH BELOW, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
manually executed by or on behalf of the Trustee under the Indenture, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, AVCO FINANCIAL SERVICES, INC. has caused
this instrument to be signed in its corporate name by the signatures or
facsimile signatures of its President or a Vice-President, and its Secretary or
an Assistant Secretary, and its corporate seal or a facsimile thereof to be
hereon impressed, engraved or imprinted and attested by such signature or
facsimile signature of its Secretary or an Assistant Secretary.
Dated: AVCO FINANCIAL SERVICES, INC.
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION By:
This is one of the Securities
of the series provided for under
the within-mentioned indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee Executive Vice-President
(Seal)
By:
Attest:
Authorized Officer Secretary
<PAGE> 3
1. This Note is one of a duly authorized issue of
debentures, notes or other evidences of indebtedness (hereinafter called the
"Securities") of the Company of the series hereinafter specified, all such
Securities issued and to be issued under an indenture dated as of September 15,
1992, between the Company and The First National Bank of Chicago, as Trustee
(herein called the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the rights and
limitations of rights thereunder of the Holders of the Securities and of the
rights, obligations, duties and immunities of the Trustee for each series of
Securities and of the Company, and the terms upon which the Securities are and
are to be authenticated and delivered. As provided in the Indenture, the
Securities may be issued in one or more series which different series may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest, if any, at different rates, may be subject to different
redemption provisions, if any, may be subject to different sinking, purchase or
analogous funds, if any, may be subject to different covenants and Events of
Default and may otherwise vary as in the Indenture provided or permitted. This
Note is one of a series of the Securities designated therein as Medium-Term
Notes, Series G (the "Notes"). The Notes of this series may be issued at
various times with different maturity dates and different principal repayment
provisions, may bear interest at different rates, and may otherwise vary, all
as provided in the Indenture.
2. A. The regular record date (the "Regular Record Date")
with respect to any Interest Payment Date (as defined below) shall be the date
15 calendar days immediately preceding such Interest Payment Date, whether or
not such date shall be a Business Day (unless otherwise shown on the face
hereof or specified in paragraph B below). Interest which is payable and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the person in whose name the Note is registered at the close of
business on the Regular Record Date for such Interest Payment Date; provided,
however, that interest payable on the Interest Payment Date occurring at
Maturity will be to the person to whom principal shall be payable.
Notwithstanding the foregoing, any interest that is payable but not punctually
paid or duly provided for on any Interest Payment Date shall forthwith cease to
be payable to the registered owner hereof on such Regular Record Date, and may
be paid to the person in whose name such Note is registered on the close of
business on a special record date (the "Special Record Date") for the payment
of such Defaulted Interest to be fixed by the Trustee, notice whereof having
been given to the Holder of such Note not less than ten days prior to such
Special Record Date, or may be paid at any time and in any other lawful manner,
or as more fully provided in the Indenture. "Business Day" means any day,
other than a Saturday or Sunday, that is (a) not a day on which banking
institutions are authorized or required by law or regulation to be closed in
The City of New York and (b) with respect to a LIBOR Note, a London Banking
Day. "London Banking Day" means any day on which dealings in deposits in U.S.
Dollars are transacted in the London Interbank market. In connection with any
calculations, all percentages will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point being rounded upwards and all dollar amounts used and
resulting from such calculations on the Notes will be rounded to the nearest
one-hundredth of a unit (with .005 of a unit being rounded upwards).
B. If this is a Fixed Rate Note, the Company promises to
pay interest on the principal amount at the rate per annum shown on the face
hereof until the principal amount hereof is paid or duly made available for
payment. Unless otherwise provided on the face hereof, the Company will pay
interest semi-annually on May 1 and November 1 (each an "Interest Payment
Date"), commencing with the Interest Payment Date immediately following the
Original Issue Date shown on the face hereof and at Maturity; provided,
however, that the first payment of interest on any Fixed Rate Note with an
Original Issue Date shown on the face hereof between a Regular Record Date and
an Interest Payment Date will be made on the Interest Payment Date following
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<PAGE> 4
the next succeeding Regular Record Date; provided, further, that any payment
required to be made on a date that is not a Business Day need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such date, and no additional interest shall
accrue as a result of such delayed payment. Unless otherwise specified on the
face hereof, the Regular Record Dates with respect to Interest Payment Dates
occurring on May 1 and November 1 shall be April 15 and October 15,
respectively. Interest will accrue from and including the most recent Interest
Payment Date or, if no interest has been paid or duly provided for, from and
including the Original Issue Date on the face hereof, to, but excluding the
Interest Payment Date. The amount of such interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months.
C. If this is a Floating Rate Note, the Company promises
to pay interest on the principal amount at the rate per annum determined in
accordance with the provisions below under the heading "Determination of CD
Rate", "Determination of Commercial Paper Rate", "Determination of Federal
Funds Rate", "Determination of LIBOR", "Determination of Prime Rate" or
"Determination of Treasury Rate", depending upon whether the Base Rate
specified above is CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR,
Prime Rate or Treasury Rate, respectively, and in accordance with any
applicable provisions on the face hereof under the heading "Other Provisions",
until the principal hereof is paid or duly made available for payment. The
Company will pay interest monthly, quarterly, semi-annually or annually as
specified on the face hereof under "Interest Payment Period", commencing with
the first Interest Payment Date specified on the face hereof next succeeding
the Original Issue Date, and at Maturity; provided, however, that the first
payment of interest on any Floating Rate Note with an Original Issue Date shown
on the face hereof between a Regular Record Date and an Interest Payment Date
will be made on the Interest Payment Date following the next succeeding Regular
Record Date. Unless otherwise provided on the face hereof, the dates on which
interest will be payable (each an "Interest Payment Date") will be, in the case
of Floating Rate Notes with a monthly Interest Payment Period, the third
Wednesday of each month; in the case of Floating Rate Notes with a quarterly
Interest Payment Period, the third Wednesday of March, June, September and
December, in the case of Floating Rate Notes with a semi-annual Interest
Payment Period, the third Wednesday of the two months specified on the face
hereof; and in the case of Floating Rate Notes with an annual Interest Payment
Period, the third Wednesday of the month specified on the face hereof;
provided, however, that if an Interest Payment Date would otherwise be a day
that is not a Business Day, such Interest Payment Date shall be postponed to
the next day that is a Business Day, except that in case the Base Rate is
LIBOR, if such date falls in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding Business Day. If the Maturity
Date (or date of redemption or repayment) of any Floating Rate Note would fall
on a day that is not a Business Day, the payment of interest and principal (and
premium, if any) may be made on the next succeeding Business Day, and no
interest on such payment will accrue for the period from and after the Maturity
Date (or the date of redemption or repayment).
The interest payable on a Floating Rate Note on each Interest
Payment Date will include accrued interest from and including the Original
Issue Date or from and including the last date in respect of which interest has
been paid, as the case may be, to but excluding such Interest Payment Date;
provided, however, that if the Interest Reset Period is daily or weekly, the
interest payable on each Interest Payment Date, other than at Maturity, will
include accrued interest from and including the Original Issue Date or from but
excluding the last date in respect of which interest has been paid, as the case
may be, to and including, the Record Date immediately preceding such Interest
Payment Date, and the interest payable at Maturity will include accrued
interest from and including the Original Issue Date or from but
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<PAGE> 5
excluding the last date in respect of which interest has been paid, as the case
may be, to, but excluding, the date of Maturity. Such accrued interest will be
calculated by multiplying the principal amount hereof by an accrued interest
factor. This accrued interest factor shall be computed by adding the interest
factors calculated for each day in the period for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for each day
shall be computed by dividing the interest rate applicable to such day by 360
if the Base Rate is CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR
or Prime Rate, as indicated on the face hereof, or by the actual number of days
in the year if the Base Rate is Treasury Rate, as indicated on the face hereof.
The interest rate in effect on each day will be (a) if such day is an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to such Interest Reset Date or (b) if such day is not an Interest
Reset Date, the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date; provided, however, unless
otherwise specified on the face hereof, the interest rate in effect from the
Original Issue Date to the first Interest Reset Date (the "Initial Interest
Rate") will be determined as if the Original Issue Date were an Interest Reset
Date. Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, shown on the face hereof. In addition, the interest
rate hereon shall in no event be higher than the maximum rate, if any,
permitted by New York law. Commencing with the first Interest Reset Date
specified on the face hereof following the Original Issue Date and thereafter
upon each succeeding Interest Reset Date specified on the face hereof, the rate
at which interest on a Floating Rate Note is payable shall be adjusted as
specified on the face hereof under Interest Reset Period; provided, however,
that if any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be postponed to the next day that is a
Business Day, except that (i) if the Base Rate is LIBOR and such Business Day
is in the next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day or (ii) if the Base Rate is Treasury Rate
and the Interest Reset Date falls on a date which is an auction date, the
Interest Reset Date shall be the following day that is a Business Day.
The Interest Determination Date pertaining to an Interest
Reset Date will be, if the Base Rate is CD Rate, Commercial Paper Rate, Federal
Funds Rate or Prime Rate, the second Business Day next preceding such Interest
Reset Date. The Interest Determination Date pertaining to an Interest Reset
Date will be, if the Base Rate is LIBOR, the second London Banking Day next
preceding such Interest Reset Date. The Interest Determination Date pertaining
to an Interest Reset Date will be, if the Base Rate is Treasury Rate, the day
of the week in which such Interest Reset Date falls on which direct obligations
of the United States ("Treasury Bills") of the Index Maturity specified on the
face hereof are auctioned. Treasury Bills are normally auctioned on Monday of
each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that such auction may be held on
the preceding Friday. If, as a result of a legal holiday, an auction is so
held on the preceding Friday, such Friday will be the Interest Determination
Date pertaining to the Interest Reset Date occurring in the next succeeding
week.
Subject to applicable provisions of law and except as
specified herein, on each Interest Reset Date the rate of interest shall be the
rate determined in accordance with the provisions of the applicable heading
below.
Determination of CD Rate. If the Base Rate is CD Rate, as
indicated on the face hereof, the interest rate shall equal (a) the rate on the
Interest Determination Date specified on the face hereof for negotiable
certificates of deposit having the Index Maturity specified on the face hereof
(1) as published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
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<PAGE> 6
publication of the Board of Governors of the Federal Reserve System (the
"H.15(519)"), under the heading "CDs (Secondary Market)" or (2) if such rate is
not so published by 9:00 A.M., New York City time, on the Calculation Date (as
defined below) pertaining to such Interest Determination Date, then as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 P.M. Quotations for U.S. Government Securities" (the
"Composite Quotations") under the heading "Certificates of Deposit" or (b) if
neither of such rates is published by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the arithmetic
mean as calculated by the Calculation Agent of the secondary market offered
rates as of 10:00 A.M., New York City time, on such Interest Determination Date
of three leading nonbank dealers in negotiable U.S. Dollar certificates of
deposit in The City of New York selected by the Calculation Agent for
negotiable certificates of deposit of major United States money center banks of
the highest credit standing (in the market for negotiable certificates of
deposit) with a remaining maturity closest to the Index Maturity (as specified
on the face hereof) in a denomination of $5,000,000, in each of the above cases
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified
on the face hereof; provided, however, that if such dealers are not quoting as
mentioned above, the CD Rate shall be the CD Rate in effect on such Interest
Determination Date.
Determination of Commercial Paper Rate. If the Base Rate is
Commercial Paper Rate, as indicated on the face hereof, the interest rate shall
equal (a) the Money Market Yield (as defined herein) on the Interest
Determination Date specified on the face hereof of the rate for commercial
paper having the Index Maturity specified on the face hereof (1) as published
in the H.15(519), under the heading "Commercial Paper", or (2) if such yield is
not so published by 9:00 A.M., New York City time, on the Calculation Date (as
defined below) pertaining to such Interest Determination Date, then as
published in the Composite Quotations under the heading "Commercial Paper" or
(b) if neither of such yields is published by 3:00 P.M., New York City time, on
such Calculation Date, the Money Market Yield of the arithmetic mean as
calculated by the Calculation Agent of the offered rates, as of 11:00 A.M., New
York City time on such Interest Determination Date, of three leading dealers of
commercial paper in The City of New York, selected by the Calculation Agent,
for commercial paper of the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA" or the equivalent, from a
nationally recognized statistical rating agency, in each of the above cases
adjusted by the addition or subtraction of the Spread, if any, specified on the
face hereof, or by multiplication by the Spread Multiplier, if any, specified
on the face hereof; provided, however, that if such dealers are not quoting as
mentioned above, the Commercial Paper Rate shall be the Commercial Paper Rate
in effect on such Interest Determination Date.
"Money Market Yield" shall be the yield calculated in
accordance with the following formula:
Money Market Yield = D x 360
------------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Determination of Federal Funds Rate. If the Base Rate is
Federal Funds Rate, as indicated on the face hereof, the interest rate shall
equal (a) the rate on the Interest Determination Date specified on the face
hereof for Federal Funds (1) as published in the H.15(519), under the heading
"Federal Funds (Effective)" or (2) if such rate is not so published by 9:00
A.M., New York City time, on the Calculation Date (as defined below) pertaining
to such
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<PAGE> 7
Interest Determination Date, then as published in the Composite Quotations
under the heading "Federal Funds/Effective Rate" or (b) if neither of such
rates is published by 3:00 P.M., New York City time, on such Calculation Date
pertaining to such Interest Determination Date, the arithmetic mean as
calculated by the Calculation Agent of the rates for the last transaction in
overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent as of
11:00 A.M., New York City time, on such Interest Determination Date, in each of
the above cases adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof; provided, however, that if such brokers are
not quoting as mentioned above, the Federal Funds Rate shall be the Federal
Funds Rate in effect on such Interest Determination Date.
Determination of LIBOR. If the Base Rate indicated on the
face hereof is LIBOR, with respect to LIBOR indexed to the offered rates for
U.S. Dollar deposits, the interest rate shall equal either (a) if the method of
calculation of LIBOR is specified on the face hereof to be "LIBOR - Reuters",
the arithmetic mean as calculated by the Calculation Agent of offered rates for
deposits in U.S. Dollars having the Index Maturity specified on the face
hereof, commencing on the second London Banking Day immediately following the
Interest Determination Date specified on the face hereof, which appear on the
Reuters Screen LIBO Page as of 11:00 A.M., London time, on such Interest
Determination Date, adjusted by the addition or subtraction of the Spread, if
any, specified on the face hereof or by multiplication by the Spread
Multiplier, if any, specified on the face hereof, or (b) if the method of
calculation of LIBOR is specified on the face hereof to be "LIBOR - Telerate"
or if no method of calculation of LIBOR is specified, the rate for deposits in
U.S. Dollars having the Index Maturity specified on the face hereof which
appears on the Telerate Page 3750 or such other page which may replace Telerate
Page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks (the "Telerate Page") as of 11:00 A.M., London
time, on such Interest Determination Date, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if less than two such offered rates appear, in the case
of alternative (a) above, or if such rate does not appear on the Telerate Page,
in the case of alternative (b) above, the Calculation Agent shall request the
principal London office of each of four major banks in the London interbank
market selected by the Calculation Agent to provide a quotation of the rate at
which deposits in U.S. Dollars are offered by each such bank to prime banks in
the London interbank market at approximately 11:00 A.M., London time, on such
Interest Determination Date having the Index Maturity specified on the face
hereof commencing on the second London Banking Day immediately following such
Interest Determination Date and in a principal amount equal to an amount not
less than U.S. $1,000,000 that is representative for a single transaction in
such market at such time. Such rate of interest hereon shall equal the
arithmetic mean of (a) such quotations, if at least two quotations are
provided, or (b) if less than two quotations are provided, the rates quoted at
approximately 11:00 A.M., New York City time, on such Interest Determination
Date by three major banks in The City of New York selected by the Calculation
Agent for loans in U.S. Dollars to leading European banks having the Index
Maturity specified on the face hereof commencing on the second London Banking
Day immediately following such Interest Determination Date and in a principal
amount as aforesaid, in either case, adjusted by the addition or subtraction of
the Spread, if any, specified on the face hereof or by multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however,
that if the three banks selected as aforesaid by the Calculation Agent are not
quoting as mentioned above, the LIBOR shall be the LIBOR in effect on such
Interest Determination Date.
Determination of Prime Rate. If the Base Rate is Prime Rate,
as indicated on the face hereof, the interest rate shall equal (a) the rate on
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<PAGE> 8
the Interest Determination Date specified on the face hereof for Prime Rate (a)
as published in the H.15(519), opposite the caption "Bank Prime Loan" or (b) if
such rate is not so published by 9:00 A.M., New York City time, on the
Calculation Date (as defined below) pertaining to such Interest Determination
Date, the Prime Rate for such Interest Determination Date will be (1) the
arithmetic mean of the rates of interest publicly announced by each bank named
on Page "NYMF" on the Reuters Monitor Money Rates Services (or such other page
as may replace the NYMF Page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks) as such bank's
prime rate or base lending rate as in effect for such Interest Determination
Date as quoted on such Page on such Interest Determination Date, or, (2) if
fewer than four such rates appear on such Page for such Interest Determination
Date, the rate shall be the arithmetic mean of the prime rates quoted on the
basis of the actual number of days in the year divided by 360 as of the close
of business on such Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent from which quotations are requested; provided, however, that if fewer
than two such quotations are provided, the Prime Rate shall be calculated by
the Calculation Agent and shall be determined as the arithmetic mean on the
basis of the prime rates in The City of New York by the appropriate number of
substitute banks or trust companies organized and doing business under the laws
of the United States, or any State thereof, in each case having total equity
capital of at least U.S. $500 million and being subject to supervision or
examination by federal or state authority, selected by the Calculation Agent to
quote such rate or rates, in each of the above cases adjusted by the addition
or subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if such banks or trust companies selected as aforesaid
by the Calculation Agent are not quoting as mentioned above, the "Prime Rate"
in effect for the applicable period will be the same as the Prime Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable on the Prime Rate Notes for which
such Prime Rate is being determined shall be the Initial Interest Rate).
Determination of Treasury Rate. If the Base Rate is Treasury
Rate as indicated on the face hereof, the interest rate shall equal the rate
for the auction held on the Interest Determination Date of Treasury Bills
having the Index Maturity shown on the face hereof as published in the
H.15(519), under the heading "Treasury Bills--auction average (investment)" or,
if not so published by 9:00 A.M., New York City time, on the Calculation Date
(as defined below) pertaining to such Interest Determination Date, the auction
average rate (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced
by the United States Department of the Treasury, in either case, adjusted by
the addition or subtraction of the Spread, if any, specified on the face
hereof, or, by multiplication by the Spread Multiplier, if any, specified on
the face hereof. In the event that the results of the auction of Treasury
Bills having the Index Maturity shown on the face hereof are not published or
reported as provided above by 3:00 P.M., New York City time, on such
Calculation Date or if no such auction is held in a particular week, then the
rate of interest hereon shall be calculated by the Calculation Agent and shall
be a yield to maturity (expressed as a bond equivalent on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity shown on the face hereof, adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof;
provided, however, that if the dealers selected as aforesaid by the
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<PAGE> 9
Calculation Agent are not quoting as mentioned above, the Treasury Rate shall
be the Treasury Rate in effect on such Interest Determination Date.
The Calculation Date pertaining to an Interest Determination
Date shall be the earlier of (i) the tenth calendar day after such Interest
Determination Date or if any such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day preceding the applicable
Interest Payment Date or Maturity Date (or date of redemption or repayment), as
the case may be. Unless otherwise specified on the face hereof, The First
National Bank of Chicago shall be the Calculation Agent. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing and
will confirm in writing such calculation to the Trustee and any Paying Agent
immediately after each determination. Neither the Trustee nor any Paying Agent
shall be responsible for any such calculation. At the request of the Holder
hereof the Calculation Agent will provide to the Holder hereof the interest
rate hereon then in effect and, if determined, the interest rate which will
become effective as of the next Interest Reset Date.
D. If this is an Indexed Note, any interest payments will be
determined in accordance with the provisions above under the heading "Other
Provisions."
3. Unless indicated on the face hereof that this Note is a
Global Security, payments of interest (other than interest payable at Maturity)
will be made by mailing a check to the Holder at the address of the Holder
appearing on the Securities Register on the applicable Record Date.
Notwithstanding the foregoing, a Holder of $10,000,000 or more in aggregate
principal amount of Notes of like tenor and terms shall be entitled to receive
such payments by wire transfer of immediately available funds, but only if
appropriate payment instructions have been received in writing by the Company's
Paying Agent in The City of New York not less than 15 days prior to the
applicable Interest Payment Date. Unless indicated on the face hereof that
this Note is a Global Security, principal and any premium and interest payable
at Maturity will be paid in immediately available funds upon surrender of such
Note at the office of a Paying Agent in The City of New York or at such other
office or agency as the Company may designate. If indicated on the face hereof
that this Note is a Global Security, the principal hereof and any premium and
interest due on any Interest Payment Date or at Maturity will be made available
to the Trustee on such date. As soon as possible thereafter, the Trustee will
make such payments to the Depositary in immediately available funds in
accordance with existing arrangements between the Trustee and the Depositary.
4. If specified on the face hereof, this Note may be
redeemed, as a whole or from time to time in part, at the option of the
Company, on not less than 30 nor more than 60 days' prior notice given as
provided in the Indenture, on any Redemption Date(s) and at the related
Redemption Price(s) (expressed as a percentage of the principal amount hereof)
set forth on the face hereof, together with interest accrued and unpaid hereon
to such Redemption Date. If no such Redemption Date is set forth on the face
hereof, this Note may not be so redeemed prior to stated Maturity. If less
than all the Outstanding Notes of like tenor and terms are to be redeemed, the
particular Notes to be redeemed shall be selected by the Trustee not more than
60 days prior to the Redemption Date from the Outstanding Notes of like tenor
or terms not previously called for redemption. Such selection shall be of
principal amounts in increments of $1,000 (provided that any remaining
principal of any Note shall be at least $1,000), or such other minimum
denomination specified on the face hereof. Subject to the immediately
preceding sentence, such selection shall be made by any method as the Trustee
deems fair and appropriate. The notice of such redemption shall specify which
Notes are to be redeemed. In the event of redemption of this Note in part
only, a new Note or Notes of this series of like tenor or terms for the
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<PAGE> 10
unredeemed portion hereof will be issued to the Holder hereof upon the
cancellation hereof.
5. If specified on the face hereof, this Note will be subject
to repayment at the option of the Holder hereof on the Redemption Date(s) and
at the Repayment Price(s) (expressed as a percentage of the principal amount
hereof) indicated on the face hereof. If no such Repayment Date is set forth
on the face hereof, this Note may not be so repaid prior to stated Maturity.
On each Repayment Date, if any, this Note shall be repayable in whole or in
part at the option of the Holder hereof at the applicable Repayment Price set
forth on the face hereof, together with interest accrued and unpaid hereon to
such Repayment Date. For this Note to be repaid in whole or in part at the
option of the Holder hereof, the Paying Agent in The City of New York must
receive not less than 30 nor more than 45 days prior to the Repayment Date (i)
the Note with the form entitled "Option to Elect Repayment" below duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name of the Holder of the Note, the
principal amount of the Note, the certificate number of the Note or a
description of the Note's tenor or terms, the principal amount of the Note to
be prepaid, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Note to be prepaid with the form entitled
"Option to Elect Repayment" on the reverse of the Note duly completed will be
received by such Paying Agent no later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter and such Note and
form duly completed are received by such Paying Agent by such fifth Business
Day. Exercise of such repayment option shall be irrevocable. Such option may
be exercised by the Holder for less than the entire principal amount provided
that the principal amount remaining outstanding after repayment is at least
$1,000 or any amount that is a multiple of $1,000, or such other minimum
denomination specified on the face hereof.
6. If an Event of Default with respect to the Notes shall
occur and be continuing, the principal of all of the Notes may be declared due
and payable in the manner and with the effect provided in the Indenture. If
the principal of any Original Issue Discount Note is declared to be due and
payable the amount of principal due and payable with respect to such Note shall
be limited to the sum of the aggregate principal amount of such Note multiplied
by the Issue Price (expressed as a percentage of the aggregate principal
amount) indicated on the face hereof plus the original issue discount accrued
from the Original Issue Date indicated on the face hereof to the date of
declaration, which accrual shall be calculated using the "interest method"
(computed in accordance with generally accepted accounting principles) in
effect on the date of declaration. An Original Issue Discount Note is a Note
that has a stated redemption price at maturity that exceeds its Issue Price by
at least 0.25% of its Principal Amount, multiplied by the number of full years
from the Original Issue Date to the Maturity Date for such Note and any other
Note designated by the Company as issued with original issue discount for
United States federal income tax purposes.
7. The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
under the Indenture at any time by the Company with the consent of the Holders
of 66 2/3% in principal amount of the Securities at the time Outstanding of
each series to be affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities of any series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences with respect to such series. Any such consent or waiver by
the Holder of this Note shall be conclusive and binding upon such Holder and
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<PAGE> 11
upon all future Holders of this Note and of any Note issued upon the transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.
8. No reference herein to the Indenture and no provision of
this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or currency
herein prescribed.
9. The authorized denominations of Notes will be $1,000 and
any multiple of $1,000, or such other minimum denomination specified on the
face hereof.
10. As provided in the Indenture and subject to certain
limitations therein set forth, this Note is transferable on the Securities
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company to be maintained for that
purpose in The City of New York or at any other office or agency of the Company
maintained for that purpose. Every Note presented for registration of transfer
shall (if so required by the Company, the Trustee or the Securities Registrar)
be duly endorsed, or accompanied by a written instrument or transfer in form
satisfactory to the Company, the Trustee and the Securities Registrar duly
executed, by the Holder hereof or its attorney duly authorized in writing, and
thereupon one or more new Notes of like tenor and terms of authorized
denominations and for the same aggregate principal amount, will be issued to
designated transferee or transferees.
The Company shall not be required (i) to issue, register the
transfer of or exchange Notes to be redeemed for a period of 15 days preceding
the date of the mailing of the notice of redemption, or (ii) to register the
transfer of or to exchange any such Note or portion thereof selected for
redemption, except the unredeemed portion of any such Note being redeemed in
part.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of a Note for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the person in
whose name a Note is registered as the owner hereof for all purposes whether or
not such Note be overdue and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
11. Unless otherwise defined herein, all terms used in
this Note which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
12. The Indenture and this Note shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
13. If indicated on the face hereof that this Note is a
Global Security, no holder of any beneficial interest in this Note held on its
behalf by a Depositary or a nominee of such Depositary shall have any rights
under the Indenture with respect to such Global Security, and such Depositary
or nominee may be treated by the Company, the Trustee, and any agent of the
Company or the Trustee as the owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall impair, as
between a Depositary and such holders of beneficial interests, the operation of
customary practices governing the exercise of the rights of the Depositary as
holder of any Security.
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<PAGE> 12
14. If not indicated on the face hereof that this Note is
a Global Security, this Note is exchangeable for a like aggregate principal
amount of Notes of a different authorized denomination, as requested by the
Holder surrendering the same, as provided in the Indenture and subject to
certain limitations therein set forth. If indicated on the face hereof that
this Note is a Global Security, it is exchangeable, in whole but not in part,
for Notes registered in the names of Persons other than the Depositary or its
nominee or in the name of a successor to the Depositary or a nominee of such
successor depositary only if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for this Note or if at any time
such Depositary shall no longer be eligible or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and, in either case, a successor depositary is not appointed by the
Company within 90 days of the receipt by the Company of such notice or of the
Company becoming aware of such ineligibility, or (ii) the Company in its
discretion at any time determines not to have all of the Notes represented by
one or more Global Security or Securities. If this Note is exchangeable
pursuant to the preceding sentence, it shall be exchangeable for Notes of like
tenor and terms in definitive form in aggregate principal amount equal to the
principal amount of the Global Security. Subject to the foregoing, if this
Note is a Global Security it is not exchangeable, except for a Note or Notes of
the same aggregate denominations to be registered in the name of such
Depositary or its nominee or in the name of a successor to the Depositary or a
nominee of such successor depositary.
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<PAGE> 13
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------
- ----------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
______________________________________________________________________________
the within Note of AVCO FINANCIAL SERVICES, INC. and hereby does irrevocably
constitute and appoint _______________________________________________________
attorney to transfer the said Note on the books of the within-mentioned
Company, with full power of substitution in the premises.
Dated _____________________________
___________________________________ ____________________________________
By: Signature Guarantee
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatsoever; and NOTICE: The signature must be
guaranteed by a financial institution that is a member of the Securities
Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the
New York Stock Exchange, Inc. Medallion Signature Program.
____________________________
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<PAGE> 14
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion hereof specified below) pursuant to its
terms at a price equal to the applicable Repayment Price thereof together with
interest to the Repayment Date, to the undersigned at__________________________
_______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid
______________________________; and specify the denomination or denominations
(which shall be in authorized denominations) of the Notes to be issued to the
Holder for the portion of the within Note not being repaid (in the absence of
any such specification, one such Note will be issued for the portion not being
repaid): ______________________________.
Dated _____________________________
____________________________________ ___________________________________
By: Signature Guarantee
NOTICE: The signature to this Option to Elect Repayment must correspond with
the name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatsoever; and NOTICE: The signature
must be guaranteed by a financial institution that is a member of the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc. Medallion Signature Program.
____________________________
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